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UNIVERSITY  OF  ILLINOIS 
LIBRARY 

Class  Book  Volume 


5^0     T^i&f 


Je  07-lOM 


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i\ni  2  1  1940 
JUL  -5  1341 


17625-S 


THE    FEDERAL    POWER 

OVER 

CARRIERS   AND   CORPORATIONS 


'?&&& 


THE  FEDERAL  POWER 


OVER 


CARRIERS  AND  CORPORATIONS 


BY 

E.   PARMALEE    PRENTICE 


Nrtu  got* 
THE    MACMILLAN   COMPANY 

LONDON :   MACMILLAN  &  CO.,  Ltd. 
I907 

All  rights  reserved 


Copyright,  1907, 
By  THE  MACMILLAN   COMPANY. 


Set  up  and  electrotyped.     Published  January,  1907. 


Nflttoooo  $ress 

J.  S.  Cushing  &  Co.  —  Berwick  &  Smith  Co. 

Norwood,  Mass.,  U.S.A. 


PREFACE 

The  present  work  deals,  as  its  title  indicates,  with 
the  nature  and  extent  of  powers  belonging  to  the 
general  government,  not  with  Congressional  legis- 
lation. One  statute,  however,  the  Act  of  July  2, 
1890,  popularly  known  as  the  Sherman  Anti-Trust 
Act,  so  closely  concerns  the  principles  of  govern- 
ment that  it  has  required  a  full  consideration. 

It  is  common  in  discussing  these  questions  largely 
to  disregard  the  purposes  which  influenced  the 
formation  of  our  government  and  for  a  century 
directed  its  administration.  Present  questions,  it 
is  urged,  are  new,  beyond  the  contemplation  of  the 
statesmen  of  a  century  ago,  and  new  meanings  must 
therefore  be  given  to  the  Constitution.  This  is 
surely  a  most  dangerous  and  mistaken  notion. 

The  nature  of  man  and  the  principles  of  govern- 
ment are  not  changed.  Personal  liberty  is  as  pre- 
cious as  of  old,  and  its  preservation  is  still  of  first 
importance.  The  influences  which  endanger  free 
government,  and,  if  unrestrained,  lead  to  the  license 
of  the  mob  or  to  arbitrary  rule,  are  present  in  our, 
as  in  all  other  peoples.     That  so  many  persons  are 


vi  PREFACE 

ready,  without  very  serious  consideration  of  the 
structure  of  government,  to  approve  any  method 
which  seems  to  promise  effective  control  of  corpora- 
tions, shows  that  the  American  people  have  so  long 
lived  in  consciousness  of  complete  safety  for  all 
private  rights,  that  the  methods  by  which,  in  the 
formation  of  the  Constitution,  individuals  were  pro- 
tected against  arbitrary  power,  seem  no  longer  to 
demand  attention.  And  yet  it  is  perhaps  in  the 
light  which  history  throws  upon  the  science  of 
government,  that  the  past  makes  its  most  valuable 
contribution  to  the  present.  When  this  contribu- 
tion is  disregarded,  when  the  past  offers  no  guide, 
the  future,  in  the  words  of  one  of  the  greatest 
American  publicists,  offers  no  security. 

The  Constitution  is  a  historical  document.  Its 
meaning,  and  the  interpretations  it  has  received  as 
the  final  adjudications  of  time  and  authority,  can  be 
determined  only  by  taking  the  decisions  which  have 
construed  its  terms  in  connection  with  contempora- 
neous conditions,  and  by  study  of  constitutional 
practice  of  States  and  Congress. 

Cases  of  latest  date,  however,  are  commonly  those 
which  carry  greatest  authority.  There  has  been  a 
tendency,  therefore,  in  reading  opinions  of  the  Su- 
preme Court  to  accept  each  decision  as  a  new  point 
of  departure.     In  consequence,  some  of  the  earlier 


PREFACE  vii 

cases,  upon  which  it  is  now  sought  to  build  further 
extensions  of  Federal  power,  —  as,  for  example,  the 
famous  case  of  Gibbons  v.  Ogden,  decided  by  Mr. 
Chief  Justice  Marshall  in  1824,  —  have  been  quoted 
as  establishing  doctrines  which  their  illustrious 
authors  would  have  been  first  to  deny. 

This  method  of  construction  has  never  received 
the  approval  of  the  Supreme  Court.  The  Consti- 
tution "  speaks  not  only  in  the  same  words,  but  with 
the  same  meaning  and  intent  with  which  it  spoke 
when  it  came  from  the  hands  of  its  framers  and  was 
voted  on  and  adopted  by  the  people  of  the  United 
States."  This  statement  by  Mr.  Chief  Justice  Taney 
has  lately  been  reaffirmed,  when  the  Court,  speaking 
by  Mr.  Justice  Brewer,  said,  "  The  Constitution  is  a 
written  instrument.  As  such  its  meaning  does  not 
alter.  That  which  it  meant  when  adopted  it  means 
now.  .  .  .  Those  things  which  are  within  its  grants 
of  power,  as  those  grants  were  understood  when 
made,  are  still  within  them,  and  those  things  not 
within  them  remain  still  excluded."  To  depart 
from  a  constitutional  rule,  Mr.  Justice  Harlan  said, 
delivering  the  opinion  of  the  Court  in  another  recent 
case,  "  is  to  endanger  the  safety  and  integrity  of  our 
institutions  and  make  the  Constitution  mean  not 
what  it  says,  but  what  interested  parties  may  wish 
it  to  mean  at  a  particular  time  and  under  particular 


viii  PREFACE 

circumstances.      The  supremacy  of  the  law  is  the 
foundation  rock  upon  which  our  institutions  rest." 

Constitutional  construction  can  be  accomplished, 
then,  only  by  a  full  understanding  of  constitutional 
history.  For  such  success  as  may  attend  the  pres- 
ent effort  to  define  powers  of  government,  much  is 
owing  to  the  counsels  of  Mr.  George  Welwood 
Murray  and  Mr.  Charles  P.  Howland. 

E.  P.  P. 

15  Broad  Street,  New  York, 
December,  1906. 


CONTENTS 

CHAPTER   I 

PAGE 

Local  self-government  and  personal  liberty i 

CHAPTER   II 

The  Constitutional  Convention.  The  liberty  to  engage  in  com- 
merce. Taxation  of  imports.  Difference  between  foreign 
and  interstate  commerce.  The  purpose  of  constitutional 
construction.     Regulation  for  purposes  beyond  Federal  power       10 

CHAPTER   III 

Gibbons  v.  Ogden 

Monopolies  of  interstate  transportation  by  State  law.  Stage- 
coach monopolies ;  monopolies  of  ferriage.  Was  Gibbons 
v.  Ogden  judicial  usurpation?  Exile  as  a  punishment  for 
offences  against  State  law.  Transportation  from  United  States 
under  Virginia  law.  Difference  between  Federal  powers  over 
transportation  by  land  and  by  water.  Control  of  coasting 
trade.  State  monopolies  since  the  decision.  General  prac- 
tice of  creating  interstate  ferries  by  legal  monopoly.  Monopo- 
lies granted  by  Massachusetts  of  navigation  of  Merrimac 
River.  Monopoly  in  Georgia  of  navigation  of  Chattahoochee 
River.  The  Erie  Canal  as  a  monopoly.  The  Illinois  and 
Michigan  Canal  as  a  monopoly.  The  Camden  and  Amboy 
Railroad  monopoly  in  New  Jersey  of  traffic  between  New 
York  and  Philadelphia.  The  relation  of  this  history  to  the 
course  of  constitutional  development.  Nullification  pro- 
nounced unconstitutional  in  1824 58 

CHAPTER   IV 

Decisions  between  1824  and  1851 

Brown  v.  Maryland.  Willson  v.  Blackbird  Creek  Marsh  Com- 
pany.    The  influence  of  slavery.     Recent  labor  laws  framed 


CONTENTS 


on  precedents  of  the  slave  code.  The  constitutional  diffi- 
culty stated.  New  York  v.  Miln.  License  cases.  Pas- 
senger cases.  The  line  finally  adopted  to  divide  State  and 
Federal  power  over  commerce.     Cooley  v.  Port  Wardens      .     101 

CHAPTER   V 

Extension  of  Federal  Power  over  Carriers 

Meaning  of  the  word  "  commerce  "  in  1787.  Navigation  essential 
to  commerce.  What  relation  had  Congress  to  carriers  by 
land  ?  The  origin  of  the  right  to  engage  in  commerce.  Ori- 
gin of  carriers'  duty  to  receive,  carry,  and  deliver.  The  Eng- 
lish rule.  Extent  of  Federal  power  stated  in  the  Federalist. 
Edmund  Randolph's  views.  An  effort  to  license  interstate 
commerce  in  1852.  Meaning  and  purpose  of  power  over 
commerce.  Its  relation  to  limitations  upon  State  power. 
The  prohibition  of  State  taxation  of  imports.  Present  power 
of  Congress  derived,  not  from  commerce  clause,  but  rather  a 
development  from  power  to  keep  unimpaired  the  limitations 
upon  the  States.  Illustrated  by  power  to  regulate  railway 
rates 121 

CHAPTER  VI 

Federal  Incorporation 

The  nature  of  a  corporate  charter  with  reference  to  State  and 
Federal  powers.  Incorporation  of  banks.  Debate  in  Consti- 
tutional Convention.  Hamilton's  opinion  on  this  debate. 
Opinion  of  Edmund  Randolph.  The  United  States  Bank. 
McCulloch  v.  Maryland.  Organization  of  trading  companies. 
Navigating  companies.  Corporations  to  operate  under  Fed- 
eral treaties  with  foreign  nations.  Incorporation  of  interstate 
carriers.  Federal  power  of  eminent  domain.  History  of  this 
power;  its  recent  origin.  The  Pacific  railroads.  Incorpora- 
tion within  the  territories  and  the  District  of  Columbia  .         .138 

CHAPTER  VII 

The  Anti-Trust  Act 

The  mischief  to  be  remedied.  History  of  the  statute  in  Con- 
gress.    The  line  between  State  and  Federal  authority.     The 


CONTENTS  xi 


PAGE 


meaning  of  the  Sherman  Act.  Its  relation  to  constitutional 
principles.  Separation  of  legislative  and  judicial  powers. 
Judicial  history  of  the  statute.  Its  construction.  Collateral 
contracts.  Injunctions.  Application  to  railroads.  Labor 
unions.  "Reasonable"  restraints.  The  Trans-Missouri 
Freight  Association.  The  Joint  Traffic  case.  Formation  of 
partnerships  and  corporations.  The  constitutional  field  for 
operation  of  act.  The  Whiskey  Trust  cases.  The  Knight 
case.  Contracts  specifying  delivery  across  State  lines.  The 
Jellico  Mountain  Coal  Company  case.  The  Chesapeake  Fuel 
Company  case.  The  San  Francisco  Tile  Trust.  The  Beef 
Trust.  Attitude  of  some  subordinate  courts.  Political 
economy  as  a  rule  of  decision.  The  Red  Shingle  Trust  in 
Washington.  Judicial  regulation  of  domestic  State  com- 
merce. The  Northern  Securities  case.  Its  relation  to  con- 
stitutional history 156 

CHAPTER   VIII 

Conclusions 

Importance  of  State  governments.  Respect  for  law  essential  to 
free  government.  Constitutional  construction  by  executive 
order.  Origin  of  the  right  to  engage  in  interstate  commerce. 
Extent  of  the  Federal  power  of  regulation.  Regulation  for 
unconstitutional  purposes.  The  relation  of  the  Anti-Trust 
Act  to  local  self-government  and  social  development      .         .     212 


THE  FEDERAL  POWER  OVER  CAR- 
RIERS AND  CORPORATIONS 

CHAPTER  I 

LOCAL  SELF-GOVERNMENT  AND  PERSONAL  LIBERTY 

Local  self-government,  it  is  said,  is  "part  of  the  very 
nature  of  the  race  to  which  we  belong."  *  Upon  its 
maintenance  depend  the  liberty  and  the  rights  of  man 
in  every  government.2  "Those  who  dread  the  license 
of  the  mob,"  De  Tocqueville  said,  "and  those  who  fear 
absolute  power,  ought  alike  to  desire  the  gradual  de- 
velopment of  provincial  liberties."  ...  "A  cen- 
tralized administration  is  fit  only  to  enervate  the  nations 
in  which  it  exists,"  and  he  added,  "I  am  also  convinced 
that  democratic  nations  are  most  likely  to  fall  beneath 
the  yoke  of  a  centralized  administration."  3 

There  is  no  doubt  whatever  that  the  American  repub- 
lics, State  and  Federal,  established  to  protect  personal 
liberty  and  equal  rights  of  all  citizens,  intended  to  place 
these  rights,  and  local  self-government  as  their  security, 
forever  beyond  danger  of  invasion. 

Other  peoples  at  other  times  have  established  and  ad- 
ministered government  according  to  doctrines  of  polit- 
ical economy  or  notions  of  justice  most  advantageous 

1  Thomas  M.  Cooley,  note  to  "  Story  on  the  Constitution,"  Sec.  280. 

2  Letter  to  Cabell,  Jefferson's  Works,  Vol.  VI,  p.  543. 

3  "  Democracy  in  America"  (The  Century  Co.,  1898),  Ch.  V,  p.  99. 


2  THE   FEDERAL   POWER   OVER 

to  the  ruling  class,  so  that  it  has  been  said  that  the  his- 
tory of  public  law  is  the  history  of  ancient  abuses.     Gov- 
ernments so  formed  or  administered  have  disappeared 
when  the  class  they  served  ceased  to  rule.     The  Ameri- 
can governments  had  no  such  origin.     In  their  establish- 
ment doctrines  of  political  economy  and  theories  as  to 
the  distribution  of  wealth,   "the  most  common  and 
durable  source  of  factions/' '  were  not  permitted  to  inter- 
fere.    The  purpose  of  the  framers  was  to  rest  govern- 
ment upon  those  essential  principles  of  liberty  which 
are  the  foundations  of  democracy  and  its  assurance  of 
permanence.     This  was  the  "  great  experiment  upon  the 
theory  of  human  rights,"2  and  this  it  was  thought  had 
been  accomplished  by  the  division  of  powers  between 
the  States  and  the  Federal  government.     The  service 
performed  by  the  framers  of  the  Federal   Constitu- 
tion was  that  they  devised  a  system  whereby  a  national 
sovereignty  might  be  endowed  with  energy  and  the  forms 
and  substance  of  popular  liberty  still  be  preserved.     This 
they  did,  Mr.    Curtis   said,    "without  abolishing  the 
State  governments  and  without  impairing  a  single  per- 
sonal right  which  existed  before  they  began  their  work." 

For  many  years  after  the  adoption  of  the  Constitu- 
tion, local  jealousies,  not  only  for  State  governments, 
but  also  for  smaller  municipal  corporations,  was  such 
that  apprehensions  of  centralization  seemed  baseless. 

Very  recently  all  this  seems  to  have  changed.  Con- 
fidence in  local  government  and  jealousy  for  personal 
rights  have  given  way  to  a  popular  movement  for  the 

1  Federalist,  No.  45. 

2  First  Annual  Message,  President  J.  Q.  Adams. 

3  "  Constitutional  History,"  Ch.  XVI,  p.  265. 


CARRIERS   AND    CORPORATIONS  3 

extension  of  Federal  jurisdiction.  It  is  not  a  coincidence 
merely,  that  the  legislation  thus  brought  forward  in- 
vades private  liberty  at  the  same  time  that  it  supersedes 
long-established  powers  of  local  government.  Local 
government  is  superseded  for  the  purpose  of  restrict- 
ing private  right.  The  fundamental  fact  in  which 
the  new  movement  originates  is  that  leaders  of  public 
opinion  have  returned  to  old  world  views  of  the  functions 
of  government.  Liberty  is  no  longer  so  far  the  object 
of  popular  solicitude  as  to  prevent  a  widespread  agita- 
tion for  government  in  the  interest  of  favorite  doctrines 
of  political  economy. 

This  tendency  appears  in  many  Federal  statutes, 
most  conspicuously  in  the  Anti-Trust  Act  and  in  the  cur- 
rent proposals  for  trust  regulation  by  means  of  license 
or  compulsory  Federal  incorporation.  These  subjects, 
both  for  their  intrinsic  importance  and  because  of  then- 
effect  upon  the  form  of  society,  deserve  careful  attention. 

Federal  incorporation  and  Federal  license,  in  the 
form  now  advocated,  differ  only  in  detail.  In  one  case 
the  right  of  a  corporation  to  engage  in  interstate  com- 
merce is  to  be  dependent  upon  a  Federal  charter,  in  the 
other  upon  a  Federal  license;  in  both  cases  the  cor- 
porate organization  and  administration  are  to  be  sub- 
ject to  effective  Federal  control,  and  the  jurisdiction  of 
Congress  is  to  be  extended  over  operations  of  produc- 
tion, manufacture,  and  distribution  which  hitherto  have 
belonged  to  the  States  alone.  In  all  commercial  affairs 
conducted  by  corporations,  complete  centralization  is 
to  be  substituted  for  the  local  self-government  which 
hitherto  has  obtained. 


4  THE   FEDERAL   POWER   OVER 

Notwithstanding  the  serious  opinion  of  responsible 
officers  of  government,  that  all  this  is  well  within  the 
powers  of  Congress,1  there  is  no  doubt  that  the  plan  is 
entirely  beyond  the  scope  of  the  Constitution,  incon- 
sistent with  its  provisions  and  with  the  system  of  gov- 
ernment which  has  existed  in  this  country  since  the 
Revolution.2 

In  speaking  of  an  effort  by  implication  to  extend  Fed- 
eral powers  derived  from  the  commerce  clause  so  as 
to  control  the  processes  of  manufacture  within  a  State, 
the  Supreme  Court  said :  — 

"  The  demands  of  such  a  supervision  would  require,  not  uni- 
form legislation  generally  applicable  throughout  the  United  States, 
but  a  swarm  of  statutes  only  locally  applicable  and  utterly  incon- 
sistent. Any  movement  toward  the  establishment  of  rules  of  pro- 
duction in  this  vast  country,  with  its  many  different  climates  and 
opportunities,  could  only  be  at  the  sacrifice  of  the  peculiar  ad- 
vantages of  a  large  part  of  the  localities  in  it,  if  not  of  every  one 
of  them.  On  the  other  hand,  any  movement  toward  the  local, 
detailed,  and  incongruous  legislation  required  by  such  interpreta- 
tion would  be  about  the  widest  possible  departure  from  the  de- 
clared object  of  the  clause  in  question.  Nor  this  alone.  Even 
in  the  exercise  of  the  power  contended  for,  Congress  would  be 
confined  to  the  regulation,  not  of  certain  branches  of  industry, 
however  numerous,  but  to  those  instances  in  each  and  every 
branch  where  the  producer  contemplated  an  interstate  market. 
These  instances  would  be  almost  infinite  .  .  .;  but  still  there 
would  always  remain  the  possibility,  and  often  it  would  be  the 
case,  that  the  producer  contemplated  a  domestic  market.  In 
that  case  the  supervisory  power  must  be  executed  by  the  State ; 
and  the  interminable  trouble  would  be  presented,  that  whether 

1  Report  of  Industrial  Commission.  Speech  of  Attorney-General  Knox, 
at  Pittsburg,  copied  in  36  Cong.  Rec,  p.  412.  Report  of  Commissioner  of 
Corporations,  December,  1904. 

2  House  Report  No.  2491,  59th  Cong.,  1st  Sess. 


CARRIERS  AND   CORPORATIONS  5 

the  one  power  or  the  other  should  exercise  the  authority  in  question 
would  be  determined,  not  by  any  general  or  intelligible  rule,  but  by 
the  secret  and  changeable  intention  of  the  producer  in  each  and 
every  act  of  production.  A  situation  more  paralyzing  to  the  State 
governments,  and  more  provocative  of  conflicts  between  the 
general  government  and  the  States,  and  less  likely  to  have  been 
what  the  framers  of  the  Constitution  intended,  it  would  be  dim- 
cult  to  imagine."  1 

The  establishment  of  Federal  supremacy  in  commer- 
cial affairs  involves,  then,  an  alteration  of  fundamental 
relations  between  the  States  and  the  Federal  govern- 
ment. Great  as  this  change  would  be,  the  consequent 
alteration  in  the  relation  of  the  individual  citizen  to 
government  is  still  greater. 

Under  the  Constitution,  the  important  personal  rights 
of  every  individual,  not  residing  in  a  territory  or  a  col- 
ony, his  personal  liberty,  family  relations,  and  property 
rights,  are  derived  from  the  State,  not  from  Congress. 
Except  when  brought  into  connection  with  the  army,  the 
navy,  the  post-office,  the  tariff  or  internal  revenue,  most 
Americans  have  little  actual  contact  with  the  Federal 
government.  Because  the  State  alone,  therefore,  could 
endanger  private  liberty,  many  and  complicated  pro- 
visions have  been  inserted  in  State  Constitutions  to 
secure  individual  freedom. 

Upon  the  Federal  government,  on  the  other  hand, 
few  limitations  have  been  imposed  for  the  protection  of 
individuals.  The  proposed  method  of  trust  regulation, 
then,  which  would  take  commercial  jurisdiction  from 
the  States,  where  the  powers  of  government  are  subject 

1  Kidd  v.  Pearson,  128  U.S.  1.  21,  22. 


6  THE    FEDERAL   POWER   OVER 

to  established  restrictions,  and  vest  it  in  Congress,  free 
from  these  limitations,  is  the  establishment  of  a  par- 
liamentary despotism. 

Nothing  can  be  clearer  than  that  such  a  power  cannot 
be  established  under  the  Constitution. 

By  the  system  of  government  which  has  existed  under 
that  instrument  the  State  and  the  Federal  governments 
are  limited,  each  within  its  sphere.  A  theory  of  con- 
struction which  would  develop  an  unlimited  Congres- 
sional power  over  the  activities  of  the  citizen  discloses 
its  own  vice  —  the  assumption  of  powers  which  are 
unlimited,  only  because  not  granted. 

Examination  of  this  subject,  at  the  present  time,  cen- 
tres about  the  commerce  clause  of  the  Constitution,  and 
involves  not  only  consideration  of  its  meaning  and  of  its 
place  in  the  scheme  of  government,  but  also  requires 
consideration  of  the  relations  between  State  and  Federal 
governments;  of  the  nature  of  that  personal  liberty  upon 
which  the  fathers  placed  so  high  a  value,  and  of  the 
extent  to  which  government  was  permitted  to  interfere 
with  individual  activity. 

Among  the  powers  which  the  Constitution  vests  in 
Congress  was  one  whose  grant  few  opposed  and  from 
which  no  apprehensions  were  entertained.1  This  was 
"the  simple  power  of  regulating  trade.'' 2  At  a  time 
when  the  powers  given  to  Congress  were  "  extorted  from 
the  grinding  necessity  of  a  reluctant  people"3  this 

1  Federalist,  No.  45. 

2  Speech  of  William  Symmes  in  Convention  of  Massachusetts,  2  Elliot 
Deb.  70. 

3  See  Von  Hoist,  "  Constitutional  History,  1 750-1832,"  p.  63. 


CARRIERS  AND   CORPORATIONS  7 

power  was  given  by  "the  common  consent  of  America."  1 
Persons  who  opposed  every  other  means  to  strengthen 
Congress  consented  to  this  grant.  "Why  not,"  it  was 
asked,  "give  Congress  power  only  to  regulate  trade?"  2 

For  the  greater  part  of  the  first  century  under  the 
Constitution,  the  construction  placed  upon  the  power 
thus  granted  was  such  as  to  justify  this  attitude.  The 
power  was  not  of  an  absorbing  nature,  nor  one  whose 
possession  enabled  Congress  to  invade  either  the  juris- 
diction of  the  States  or  the  personal  liberty  of  indi- 
viduals. 

Under  the  influence  of  new  economic  views,  however, 
the  power  seems  wholly  to  have  changed  character. 
The  right  to  engage  in  foreign  and  interstate  commerce, 
it  is  now  said,  is  derived  solely  from  the  Federal  govern- 
ment, and  upon  this  ground  the  effort  has  been  made  to 
establish  Federal  control  over  all,  save  a  few  of  the 
smallest,  industrial  and  transportation  interests  of  the 
country. 

If  these  two  views  of  the  Constitution  represented 
merely  the  doctrines  of  present  and  opposing  schools  of 
constitutional  construction,  such  a  difference  of  opinion 
upon  fundamental  questions  would  still  be  unfortunate. 
If,  however,  this  difference  be  not  so  much  between 
schools  as  between  present  and  past;  if  it  mark  a  fun- 
damental change  in  the  national  conception  of  the  Consti- 
tution and  in  the  spirit  of  its  administration,  the  signifi- 
cance of  the  policy  toward  which  the  country  is  moving 

x  Speech  of  Robert  Livingston  in  Convention  of  New  York,  2  Elliot 
Deb.  214. 

2  Speech  of  Gen.  Thompson  in  Convention  of  Massachusetts,  2  Elliot 
Deb.  80. 


8  THE   FEDERAL  POWER   OVER 

becomes  apparent ;  for  important  as  undoubtedly  are  the 
economic  questions  whose  agitation  has  given  rise  to  new 
constitutional  doctrines,  the  preservation  of  the  Con- 
stitution is  more  important  still.  "There  is  one  point/ ' 
Mr.  Lecky  said,  "on  which  all  the  best  observers  in 
America,  whether  they  admire  or  dislike  democracy, 
seem  agreed.  It  is,  that  it  is  absolutely  essential  to  its 
safe  working  that  there  should  be  a  written  constitution, 
securing  property  and  contract,  placing  serious  obstacles 
in  the  way  of  organic  changes,  restricting  the  power  of 
majorities,  and  preventing  outbursts  of  mere  temporary 
discontent,  and  mere  casual  coalitions  from  overthrow- 
ing the  main  pillars  of  the  State.  In  America,  such  safe- 
guards are  largely  and  skilfully  provided,  and  to  this 
fact  America  mainly  owes  her  stability."  1 

Unfortunately  there  seems  to  be  a  growing  impatience 
with  these  very  safeguards;  a  belief  that  the  Constitu- 
tion is  not  in  all  respects  adequate  to  existing  conditions, 
and  that  new  powers  should  be  assumed  by  and  sup- 
ported in  the  Federal  government.2  The  statement  of 
this  proposition  is  probably  its  best  answer,  for  there  is 
no  general  desire  to  question  the  supremacy  of  the  Con- 
stitution, either  directly  or  by  constructions  which  are 
recognized  as  unsound.  It  is  still  true,  as  Jefferson 
said,  that  to  take  a  single  step  beyond  the  limits  which 
the  Constitution  has  fixed  for  Congress  "is  to  take 

1  "Democracy  and  Liberty,"  Vol.  I,  p.  136. 

2  Even  as  conservative  a  lawyer  as  Judge  Cooley  at  one  time  entertained 
this  view,  —  see  "  Michigan,"  American  Commonwealth  Series,  346,  but 
later  changed  his  opinion,  — see  "Written  and  Prescriptive  Constitutions," 
2  Harvard  Law  Review,  341.  On  the  general  subject  see  "The  Elasticity 
of  the  Constitution,"  by  Mr.  Arthur  W.  Machen,  Jr.,  14  Harvard  Law  Re- 
view. 200. 


CARRIERS  AND   CORPORATIONS  9 

possession  of  a  boundless  field  of  power,  no  longer  sus- 
ceptible of  any  definition."  1  This  Congressional  su- 
premacy is  not  advocated  on  any  hand,  nor  is  it  sought 
to  impose  the  ultimate  authority  upon  Congress  and  the 
Supreme  Court  together.  Participation  in  such  a  part- 
nership is,  in  a  democratic  government,  wholly  incom- 
patible with  life  tenure  of  office  and  sooner  or  later  must 
destroy  the  authority  of  the  judiciary.2 

Rousseau  said  that  popular  government,  more  than 
any  other,  most  strongly  and  constantly  tends  to  change 
its  form,  and  there  is  no  government,  therefore,  which 
demands  more  courage  and  vigilance  for  its  main- 
tenance.3 

If  this  tendency  to  change  is  to  be  resisted,  and  the 
Constitution  is  to  continue  in  fact  to  be  a  fundamental 
law,  certain  and  uniform;  if  the  Federal  government  is 
to  avoid  that  condition  described  by  Mr.  Justice  Story 
as  miserable  servitude  —  the  condition  of  legal  admin- 
istration where  the  past  furnishes  no  guide  and  the 
future  no  security,4  it  is  necessary  to  accept  the  Con- 
stitution as  a  historical  document  to  be  construed  with 
reference  to  the  purposes  of  its  framers,  and  the  history 
of  its  application. 

1  Opinion  on  U.  S.  Bank  Bill.    Jefferson's  Writings  (Ford),  Vol.  V,  p.  285. 

2  The  Constitution  "  speaks  not  only  in  the  same  words,  but  with  the  same 
meaning  and  intent  with  which  it  spoke  when  it  came  from  the  hands  of 
its  framers,  and  was  voted  on  and  adopted  by  the  people  of  the  United 
States.  Any  other  rule  of  construction  would  abrogate  the  judicial  char- 
acter of  this  court,  and  make  it  the  mere  reflex  of  the  popular  opinion  or 
passion  of  the  day."  Taney,  C.  J.,  in  Scott  v.  Sanford,  quoted  in  South 
Carolina  v.  United  States,  199  U.  S.  437. 

3  "Social  Contract,"  Book  III,  Ch.  IV. 

4  "  Commentaries  on  the  Constitution,"  Sec.  1259. 


IO  THE   FEDERAL   POWER   OVER 


CHAPTER  II 

THE    CONSTITUTIONAL    CONVENTION 

The  purpose  of  the  Commerce  Clause.  At  the  time 
the  Constitution  was  formed  and  adopted,  the  United 
States  contained  a  population  scattered  along  the 
Atlantic  seaboard,  close  to  tide-water.  Between  these 
States  thus  situated  there  was  no  considerable  commu- 
nication by  land.  A  large  commerce  was,  however, 
conducted  by  sailing  vessels  with  foreign  nations  and 
along  the  coast.  To  this  trade  the  attention  of  the 
country  was  directed. 

Its  condition  Bowdokrsaid  was  miserable.  Other 
nations  excluded  American  vessels  from  their  ports  or 
laid  heavy  duties  on  their  cargoes,  and  Congress  had  no 
retaliating  or  regulating  power  to  prevent  it.1  This 
then  was  the  first  evil  which  required  a  remedy.  Con- 
gress must  be  vested  with  power  to  tax  foreign  commerce, 
to  exclude  foreign  vessels,  and  to  retaliate  for  hostile 
measures  where  this  course  was  necessary. 

The  coasting  trade,  too,  demanded  relief  from  the 
burdens  imposed  by  State  tariffs  and  State  navigation 
laws,  and  thus  freed  should  be  open  to  American  vessels 
only.     Foreign  vessels  might  be  authorized  to  go  from 

1  Elliot  Deb.  Vol.  II,  p.  83. 


CARRIERS  AND   CORPORATIONS  n 

port  to  port  to  complete  delivery  of  a  cargo,1  but  with 
this  exception,  domestic  navigation  should  be  secured 
to  our  own  people. 

So  far  as  concerns  regulation  of  commerce  these  were 
the  specific  purposes  which  the  Constitution  was  in- 
tended to  accomplish. 

Proceedings  of  the  Constitutional  Convention.     The 

history  of  the  development  of  the  constitutional  pro- 
visions, by  which  the  Convention  accomplished  these 
objects,  is  brief. 

On  May  29,  1787,  Edmund  Randolph  introduced  into 
the  Convention  a  series  of  resolutions  broadly  outlining 
the  nature  of  government  proposed  and  the  powers  to  be 
granted.     This  was  known  as  the  Virginia  plan. 

On  the  same  day,  Charles  Pinckney  also  submitted  a 
draft  of  a  Federal  government.  Bancroft  says  of  this 
that  no  part  was  preserved,  and  no  part  used.2  It  is 
clear  that  the  paper  which  appears  in  Elliot's  Debates 
under  Pinckney' s  name  is  not  the  draft  submitted  by 
him  to  the  Convention,  but  it  is  not  difficult  to  deter- 
mine, in  outline,  the  nature  of  the  government  which  he 
proposed,  and  in  some  directions  to  go  much  farther 
than  this,  and  in  a  degree  to  reconstruct  Pinckney's 
draft.3  His  proposals  relating  to  commerce  apparently 
were  as  follows :  — 

^'Principles  on  which  a  Commercial  System  for  the  United  States 
should  be  Founded,"  read  before  the  Society  for  Political  Inquiries  at  the 
house  of  Benjamin  Franklin,  Philadelphia,  May  n,  1787.  Published 
anonymously,  but  credited  to  Tench  Coxe. 

2  Bancroft,  Vol.  VI,  p.  215;  "Pamphlets  on  the  Constitution,"  Paul 
Leicester  Ford,  p.  419. 

3  See  "Studies  in  the  History  of  the  Federal  Convention,"  by  Professor 
John  Franklin  Jameson  of  the  Carnegie  Institution,  Rep.  Am.  Hist.  Ass'n, 
1902;  see  also,  "Sketch  of  Pinckney's  Plan  for  a  Constitution,"  American 
Historical  Review,  Vol.  IX,  p.  735 ;  July,  1904. 


12  THE   FEDERAL  POWER   OVER 

"The  legislature  of  the  U.S.  shall  have  the  exclusive  Power  — 
of  raising  a  military  Land  Force  —  of  equipping  a  Navy  —  of  rating 
and  causing  public  Taxes  to  be  levied  —  of  regulating  the  Trade 
of  the  several  States  as  well  with  foreign  Nations  as  with  each 
other  —  of  levying  duties  upon  Imports  and  exports  —  of  estab- 
lishing Post  Offices  and  raising  a  Revenue  from  them  —  of  regu- 
lating Indian  Affairs,"  etc. 

This  plan,  with  Randolph's  resolutions,  was  referred 
to  a  committee  of  the  whole  house,  where  the  debate 
proceeded  upon  the  framework  of  Randolph's  resolu- 
tion. 

So  far  as  concerned  powers  over  commerce  Randolph 
proposed 

"That  the  national  legislature  ought  to  be  empowered  to  enjoy 
the  legislative  right  vested  in  Congress  by  the  Confederation :  and, 
moreover,  to  legislate  in  all  cases  to  which  the  separate  States  are 
incompetent,  or  in  which  the  harmony  of  the  United  States  may 
be  interrupted  by  the  exercise  of  individual  legislation." 

This  resolution,  though  general  in  form,  was  not  in- 
tended as  a  proposition  to  grant  an  undefined  jurisdic- 
tion to  the  new  government.  Upon  this  subject  there 
was  no  division  of  opinion.  Charles  Pinckney  and  John 
Rutledge  objected  to  the  vagueness  of  the  resolution, 
saying  that  "they  could  not  well  decide  how  to  vote 
until  they  should  see  an  exact  enumeration  of  the  powers 
comprehended  by  this  definition."  In  this  Pierce 
Butler  agreed  and  Randolph  himself  "disclaimed  any 
intention  to  give  indefinite  powers  to  the  national  legis- 
lature, declaring  that  he  was  opposed  to  such  an  in- 
road on  the  State  jurisdictions."  x 

1  Elliot  Deb.  139. 


CARRIERS  AND  CORPORATIONS  13 

At  this  stage  of  proceedings,  indeed,  it  was  impos- 
sible to  do  more  than  to  state  definitely  the  general  pur- 
poses to  be  accomplished,  and  in  this  respect  Randolph's 
resolution  was  explicit.  It  was  intended  that  Congress 
should  under  the  new  government  have  all  the  powers 
which  it  had  under  the  old;  that  in  addition  thereto 
such  further  powers  should  be  granted  as  were  neces- 
sary to  prevent  a  continuation  of  the  evils  experienced 
under  the  Confederation,  and  that  these  new  jurisdic- 
tions should  all  be  enumerated,  so  that,  as  had  been 
stated  in  Massachusetts,  only  "a  well-guarded  power 
to  regulate  trade"  *  should  be  intrusted  to  Congress. 

The  commercial  powers  vested  in  Congress  by  the 
Articles  of  Confederation  included  the  sole  and  ex- 
clusive right  and  power  of  regulating  the  alloy  and 
value  of  coin  struck  by  their  own  authority,  or  by  that 
of  the  respective  States;  of  fixing  the  standard  of  weights 
and  measures  throughout  the  United  States;  of  regulat- 
ing the  trade  and  managing  all  affairs  with  the  Indians 
not  members  of  any  of  the  States,  provided,  however, 
that  the  legislative  right  of  a  State  within  its  own  limits 
should  not  be  infringed  or  violated;  and,  lastly,  of 
establishing  and  regulating  post-offices  from  one  State 
to  another  through  the  United  States,  and  exacting  such 
postage  on  papers  passing  through  the  same  as  should  be 
requisite  to  pay  the  expenses  of  the  office.2 

These  powers,  then,  were  all  to  belong  to  Congress 
under  the  Constitution. 

The  Articles  of  Confederation  further  provided  that 
the  people  of  each  State  should  have  free  ingress  and 

1  Bancroft,  Vol.  VI,  p.  141.  2  Article  IX. 


I4  THE   FEDERAL  POWER   OVER 

egress  to  and  from  any  other  State,  and  should  enjoy 
therein  all  the  privileges  of  trade  and  commerce,  subject 
to  the  same  duties,  impositions,  and  restrictions  as  the 
inhabitants  thereof  respectively,  provided  that  such 
restrictions  should  not  extend  so  far  as  to  prevent  the 
removal  of  property  imported  into  any  State  to  any  other 
State  of  which  the  owner  was  an  inhabitant.1  States 
were  prohibited  also  from  laying  imposts  or  duties  which 
should  interfere  with  any  stipulation  in  treaties  entered 
into  by  the  United  States  with  any  king,  prince,  or  state 
in  pursuance  of  treaties  which  had  been  already  pro- 
posed by  Congress  to  the  courts  of  France  and  Spain.2 

The  provisions  last  referred  to,  and  contained  in  the 
fourth  and  sixth  of  the  Articles  of  Confederation,  vested 
no  legislative  rights  in  Congress  and,  therefore,  were  not 
strictly  within  the  scope  of  Randolph's  resolution. 

That  part  of  the  sixth  article  which  has  been  quoted 
is  represented  by  a  separate  clause  in  the  Constitution. 
The  provision  quoted  from  the  fourth  article,  however, 
found  no  place  in  the  Constitution,  except  such  as  has 
been  given  to  it  by  implication.3 

The  subjects  upon  which  the  debates  of  the  Con- 
vention principally  turned,  in  the  consideration  of  this 
resolution,  were  Federal  taxation  of  exports,  control  of 
the  slave  trade,  and  the  passage  of  a  navigation  act. 

From  the  standpoint  of  the  Northern  States,  Federal 
control  of  the  slave  trade  was  an  indispensable  neces- 
sity. The  first  great  compromise  of  the  Constitution, 
the  inclusion  of  slaves  in  estimating  population  as  a  basis 
of  representation,  placed  those  States  where  slaves  were 

1  Article  IV.  2  Article  VI.  3  Crandall  v.  Nevada,  6  Wall.  35. 


CARRIERS  AND   CORPORATIONS  15 

few  in  number  at  an  immediate  disadvantage,  and  re- 
quired for  their  future  protection  that  some  effective 
check  should  be  placed  upon  the  increase  of  slave  popu- 
lation by  importation. 

Furthermore,  the  shipping  interests  of  Northern  States 
needed  the  protection  of  a  navigation  act,  and  the  de- 
sire for  this  protection  was  one  of  their  principal  induce- 
ments to  seek  an  amendment  of  the  Articles  of  Confed- 
eration and  a  strengthening  of  the  Federal  government. 

On  the  other  hand,  the  Southern  States  desired  slaves, 
and  in  North  Carolina,  South  Carolina,  and  Georgia 
the  slave  trade  was  not  prohibited ;  the  Southern  States 
had  little  interest  in  shipping,  but  were  dependent  upon 
their  exports.  They  were  concerned  in  procuring  cheap 
transportation,  not  in  the  nationality  of  the  vessel  by 
which  transportation  was  made.  A  tax  upon  exports 
was,  therefore,  out  of  the  question,  and  a  navigation  act 
should  require  a  two-thirds  vote,  lest,  as  Mason  said, 
"a  few  rich  merchants  in  Philadelphia,  New  York,  and 
Boston  might  by  that  means  monopolize  the  staples  of 
the  Southern  States."  * 

On  June  15,  Paterson  submitted  several  resolutions, 
which,  taken  together,  have  generally  been  known  as 
the  New  Jersey  plan.  The  second  resolution  outlining 
this  plan,  provided, 

"That  in  addition  to  the  powers  vested  in  the  United  States  in 
Congress  by  the  existing  Articles  of  Confederation  they  be  author- 
ized to  pass  acts  for  raising  a  revenue  by  laying  a  duty  or  duties 
on  all  goods  and  merchandise  of  foreign  growth  or  manufacture 

1  Bancroft,  Vol.  VI,  p.  364;  "George  Mason,  Life,  Correspondence  and 
Speeches,"  Rowland,  G.  P.  Putnam's  Sons,  1892,  Vol.  II,  pp.  175,  269; 
Madison  Papers,  Vol.  Ill,  p.  1593;  Jefferson's  Works,  Vol.  VI,  p.  323. 


1 6  THE   FEDERAL  POWER  OVER 

imported  into  any  port  of  the  United  States.  To  pass  Acts  for 
the  regulation  of  trade  and  commerce  as  well  with  foreign  nations 
as  with  each  other";   etc. 

The  third  resolution  provided  that  none  of  the  powers 
vested  in  Congress  should  be  exercised  without  the 
consent  of  a  certain  number  of  States  to  be  agreed 
upon. 

These  resolutions  were  without  debate  referred  to  a 
committee  of  the  whole  house,  which  four  days  later 
reported  its  disapproval.  The  debate  upon  Randolph's 
resolutions,  therefore,  continued  until  July  23rd,  when 
the  work  of  the  Committee  of  the  Whole  was  referred  to 
a  Committee  of  Detail  to  draft  and  submit  a  Constitu- 
tion. On  the  following  day  the  Committee  of  the 
Whole,  to  which  the  Pinckney  and  Paterson  plans  had 
been  referred,  was  discharged  from  their  considera- 
tion and  they  also  were  referred  to  the  Committee  of 
Detail. 

The  Pinckney  plan  was  at  no  time  separately  con- 
sidered. It  appears  to  have  been  mentioned  but  once 
in  the  Convention,  and  then  by  its  author.  The  Pater- 
son plan  had  been  disapproved.  So  far  as  the  record 
goes,  therefore,  neither  of  these  plans  appears  to  have 
exercised  much  influence  on  the  deliberations  of  the 
Convention.  The  fact  probably  was  otherwise.  "The 
reference  of  the  New  Jersey  and  Pinckney  plans  to  the 
Committee  of  Detail  was  not,  as  has  generally  been 
assumed,  a  mere  smothering  of  them.  .  .  .  Paterson's 
proposals  for  a  power  to  lay  duties  on  imports,  to  regu- 
late commerce,"  and  a  number  of  other  provisions, 
appear  in  the  report  of  the  Committee  of  Detail,  though 


CARRIERS  AND   CORPORATIONS  17 

not  in  the  resolution  of  the  Committee  of  the  Whole. 
Pinckney's  plan  also  appears  to  have  contributed  in  a 
considerable  degree  to  the  instrument  reported  by  the 
Committee  of  Detail.1 

In  the  draft  of  Constitution  submitted  to  the  Conven- 
tion by  that  Committee  on  August  6th,  appears  a  draft 
of  the  commerce  clause  in  nearly  its  present  form.  In 
this  draft,  among  grants  of  power  to  Congress  to  raise 
revenue,  coin  money,  to  establish  post-offices,  post  and 
military  roads,  and  other  grants  upon  related  subjects, 
appears  a  grant  of  power  in  general  terms  to  "  regulate 
commerce  with  all  nations  and  among  the  several 
States.' '  The  powers  of  Congress  were,  however,  to  be 
subject  to  the  limitation  that  "no  navigation  act  shall 
be  passed  without  the  assent  of  two-thirds  of  the  mem- 
bers present  in  each  house. " 

The  difference  in  the  wording  indicates  that  the  Com- 
mittee considered  other  regulations  of  commerce  besides 
a  navigation  act  to  be  within,  the  scope  of  the  clause. 
The  important  acts  of  commercial  regulation  which  were 
discussed,  either  before  or  after  the  meeting  of  the  Con- 
vention, were  the  passage  of  a  navigation  act  and  the 
imposition  of  a  tariff.2  It  is  probable  that  the  only  regu- 
lations which  the  Committee  had  in  view,  beside  these, 
related  to  navigation  and  were  of  a  purely  local  charac- 
ter.    Revenue  being  disposed  of  by  separate  provisions 

1  "  Studies  in  the  History  of  the  Federal  Convention,"  Professor  John 
Franklin  Jameson,  Rep.  Am.  Hist.  Ass'n,  1902. 

2  Proceedings  of  Congress  Concerning  Duties,  Feb.  3,  1781;  3  Jour,  of 
Cong.  572,  573;  Proceedings  of  Congress  as  to  Regulation  of  Commerce, 
April  30,  1784;  4  Jour,  of  Cong.  392,  393;  Resolution  to  Empower  Con- 
gress to  Regulate  Trade,  Virginia  House  of  Delegates,  Nov.  30,  1785.  See 
4  Jour,  of  Cong.  621. 


18  THE   FEDERAL  POWER   OVER 

of  the  Constitution/  the  subject  of  a  navigation  act 
covered  the  field  of  commercial  regulation,  so  far  as 
concerned  matters  of  national  interest. 

The  Committee  also  reported  a  number  of  restrictions 
both  upon  the  Federal  government  and  upon  the  States. 

The  revenue  and  commercial  powers  of  Congress 
were  to  be  limited  by  requiring  uniformity  of  indirect 
taxes  and  apportionment  of  direct  taxes;  by  forbidding 
taxation  of  articles  exported  from  any  State,  and  of  the 
migration  or  importation  of  such  persons  as  any  State 
might  think  proper  to  admit.  State  taxation  of  imports, 
exports,  and  tonnage  was  also  to  be  forbidden,  and 
citizens  of  each  State  were  to  be  protected  in  the  enjoy- 
ment of  the  privileges  and  immunities  of  citizens  in  the 
several  States.2 

Taxation  of  exports,  regulation  of  the  slave  trade,  and 
passage  of  a  navigation  act  came,  therefore,  before  the 
Convention  in  the  debate  upon  the  report  of  this  Com- 
mittee. The  first  of  these  questions  concerned  the 
Federal  power  to  tax  exports.  Southern  States  were 
interested  in  finding  a  market  for  their  products.  They 
had  no  interest  in  shipping,  and  General  Pinckney 
expressed  the  views  of  Southern  delegates  when  he  said 
that  it  was  the  true  interest  of  the  South  to  have  no  regu- 
lation of  commerce.3  "Were  it  not,"  said  Mercer, 
"for  promoting  the  carrying  trade  of  the  Northern 
States,  the  Southern  States  could  let  the  trade  go  into 
foreign  bottoms,"  4  a  view  strongly  supported  by  Mason. 
A  tax  upon  exports,  therefore,  was  in  any  event  out 

1  5  How.  504,  594;  7  How.  479,  480,  549.  3  Ibid.  Vol.  V,  p.  489. 

2  Elliot,  Vol.  I,  pp.  224,  230.  *  Ibid.  p.  433. 


CARRIERS  AND   CORPORATIONS  19 

of  the  question,  unless  it  were  intended  to  reduce  the 
States  "to  mere  corporations."  1  After  a  discussion 
which  continued  until  the  21st  of  August,  the  conces- 
sion to  the  Southern  States  was  then  made,  exempting 
exports  from  taxation,  and  on  the  next  day  the  other 
matters  were  referred  to  a  Grand  Committee  consisting 
of  one  member  from  each  State.  Of  the  negotiations 
at  this  point,  Mr.  Curtis  says  :  — 

"We  know  very  little  of  the  deliberations  of  this  committee; 
but  as  each  State  was  equally  represented  in  it,  and  as  the  position 
of  the  different  sectional  objects  is  quite  clear,  we  can  have  no 
difficulty  in  forming  an  opinion  as  to  the  motives  and  purposes  of 
the  settlement  which  resulted  from  their  action,  or  in  obtaining  a 
right  estimate  of  the  result  itself. 

"In  the  first  place,  then,  we  are  to  remember  the  previous  con- 
cessions already  made  by  the  Northern  States,  and  the  advantages 
resulting  from  them.  These  concessions  were  the  representation 
of  the  slaves,  and  the  exemption  of  exports  from  taxation.  If  the 
slaves  had  not  been  included  in  the  system  of  representation,  the 
Northern  States  could  have  had  no  political  motive  for  acquiring 
the  power  to  put  an  end  to  the  slave-trade.  If  the  exports  of  their 
staple  productions  had  not  been  withdrawn  from  the  revenue 
power,  the  Southern  States  could  have  had  no  very  strong  or  special 
motive  to  draw  them  into  the  new  Union ;  but  with  such  an  exemp- 
tion they  could  derive  benefits  from  the  Constitution  as  great  as 
those  likely  to  be  enjoyed  by  their  Northern  confederates.  Both 
parties,  therefore,  entered  the  final  committee  of  compromise  with 
a  strong  desire  to  complete  the  Union,  and  to  establish  the  new 
government.  The  Northern  States  wished  for  a  full  commercial 
power,  including  the  slave-trade  and  navigation  laws,  to  be  de- 
pendent on  the  voices  of  a  majority  in  Congress.  The  Southern 
States  struggled  to  retain  the  right  to  import  slaves,  and  to  limit 

1  Elliot,  Vol.  V,  p.  456. 


20  THE   FEDERAL  POWER   OVER 

the  enactment  of  navigation  laws  to  a  vote  of  two-thirds.  Both 
parties  could  be  gratified  only  by  conceding  some  portion  of  their 
respective  demands. 

"If  the  Northern  States  could  accept  a  future,  instead  of  an 
immediate,  prohibition  of  the  slave-trade,  they  could  gain  ulti- 
mately a  full  commercial  power  over  all  subjects,  to  be  exercised 
by  a  national  majority.  If  the  Southern  States  could  confide  in  a 
national  majority,  so  far  as  to  clothe  them  with  full  ultimate  power 
to  regulate  commerce,  they  could  obtain  the  continuance  of  the 
slave-trade  for  a  limited  period.  Such  in  reality  was  the  adjust- 
ment made,"  *  and  the  report  of  this  committee,  leaving  the  con- 
trol of  navigation  with  a  majority  of  Congress,  and  giving  the 
Federal  government  power  to  prohibit  the  slave-trade  after  the 
year  1800,  —  a  date  subsequently  changed  to  1808,  —  forms 
the  second  great  compromise  of  the  Constitution." 

In  the  course  of  the  debate  upon  the  extent  of  the  com- 
mercial power  to  be  given  the  Federal  government,  many 
grants  were  discussed  aside  from  the  powers  of  regula- 
tion and  taxation. 

On  the  1 8th  of  August  it  appears  from  the  report  in 
Elliot  that  it  was  proposed  to  give  Congress  power  to 
grant  charters  of  incorporation  in  cases  where  the  public 
good  may  require  them,  and  the  authority  of  a  single 
State  may  be  incompetent;  to  regulate  stages  on  the 
post-roads;  to  regulate  affairs  with  the  Indians;  and  to 
establish  institutions  for  the  promotion  of  agriculture, 
commerce,  trade,  and  manufactures.  On  the  14th  of 
September  a  motion  was  made  by  Franklin  that  Con- 
gress be  given  power  "to  provide  for  cutting  canals. " 
Such  a  power,  Wilson  said,  was  necessary  in  order  to 

1  Curtis,  "Constitutional  History,"  Vol.  I,  pp.  509-510.  See  speech  of 
Alexander  Hamilton  in  New  York  Convention,  Elliot  Deb.,  Vol.  II,  pp. 
235-236. 


CARRIERS  AND  CORPORATIONS  21 

prevent  a  single  State  from  obstructing  the  general 
welfare.  The  motion  was  lost  on  the  ground  that  the 
expense  thereby  incurred  would  be  a  general  burden, 
while  the  benefit  would  be  local. 

The  brief  outline  of  proceedings  given  above  indi- 
cates that  in  the  course  of  the  debates,  members  of  the 
Convention  considered  broad  grants  of  commercial 
power;  that  as  the  session  neared  its  close,  powers  were 
considered  which  would  have  conferred  authority  to 
make  internal  improvements,  to  charter  a  bank,  and 
over  many  other  subjects  which  have  been  prominent 
in  constitutional  history. 

All  motions  to  make  these  grants  in  express  terms  were 
lost,  so  that  finally  the  commerce  clause  was  adopted 
substantially  in  its  original  form,  the  limitation  upon  the 
power  of  a  majority  of  Congress  being  removed,  and 
the  words  "and  with  the  Indian  tribes"  being  added. 

The  important  fact  in  reference  to  Federal  regulation 
of  commerce  which  appears  from  the  history  of  the  pro- 
ceedings of  the  Convention  is  that  the  Federal  power  is 
not  a  broad,  general  jurisdiction,  but  was  given  as  a 
definite  authority  to  accomplish  specific  purposes.  An 
"exact  enumeration  of  powers"  was  intended. 

The  purpose  to  avoid  indefiniteness  appears  in  many 
provisions  of  the  completed  instrument.  Congress,  for 
example,  is  not  only  given  power  to  coin  money,  but 
specific  authority  is  added,  to  regulate  the  value  thereof 
and  of  foreign  coin,  and  to  punish  counterfeiting.  Gen- 
eral power  is  given  to  declare  war,  and  specific  authority 
is  added  to  grant  letters  of  marque  and  reprisal,  to  make 
rules  for  the  government  of  land  and  naval  forces,  and 


22  THE   FEDERAL  POWER   OVER 

rules  concerning  captures  on  land  and  water.  A  gen- 
eral power  is  given  to  call  forth  the  militia  to  execute  the 
laws  of  the  Union,  and  there  is  added  specific  power  to 
suppress  insurrections.  Power  to  regulate  commerce, 
then,  was  not  given  as  an  indefinite  authority,  but  was 
intended  as  a  specific  authority  to  effect  certain  well- 
understood  ends. 

The  great  purposes  which  it  was  sought  by  the  Con- 
stitution to  accomplish  were  four  in  number.  It  was 
necessary  to  establish  a  federal  authority  capable  of 
raising  a  federal  revenue,  to  manage  foreign  relations,  to 
prevent  the  imposition  of  duties  by  particular  States  upon 
articles  brought  from  other  countries,  or  from  or  through 
other  States,  and  to  control  navigation.  These  four 
great  purposes  were  each  covered  by  express  provision. 

Power  to  raise  a  revenue  from  foreign  commerce  was 
granted  by  the  provision  that  Congress  may  impose 
taxes,  duties,  imposts,  and  excises,  subject,  however, 
to  the  restrictions  that  duties,  imposts,  and  excises  be 
uniform  throughout  the  country  and  that  direct  taxation 
be  apportioned  to  the  population.  Power  to  manage 
foreign  relations  was  given  by  the  provision,  among 
others,  which  authorized  the  executive,  with  the  Senate, 
to  make  treaties.  The  prevention  of  duties  by  particu- 
lar States  was  accomplished  by  express  prohibition  of 
State  taxation  of  exports  and  imports.  Federal  control 
of  navigation  was  given  by  the  commerce  clause,  sub- 
ject, however,  to  the  restrictions  that  no  preference  be 
given  to  ports  of  one  State  over  those  of  another,  and 
that  vessels  bound  to  or  from  one  State  be  not  obliged 
to  enter,  clear,  or  pay  duties  in  another. 


CARRIERS  AND   CORPORATIONS  23 

This,  then,  was  the  power,  —  a  definite  authority 
subject  to  express  restrictions  coextensive  with  the  power 
granted. 

The  liberty  to  engage  in  commerce.  Several  con- 
stitutional provisions  help  to  define  the  field  of  opera- 
tion for  this  power  so  briefly  given  to  Congress. 

The  Fourth  Article  of  the  Constitution  provides  that 

"The  citizens  of  each  State  shall  be  entitled  to  all  privileges 
and  immunities  of  citizens  in  the  several  States." 

The  Fifth  Amendment,  that 

"No  person  shall  ...  be  deprived  of  life,  liberty  or  property, 
without  due  process  of  law." 

The  Fourteenth  Amendment  protects  the  liberty  of 
every  person  against  invasion  by  State  authority. 

It  is  the  singular  good  fortune  of  the  Constitution  that 
it  was  founded  during  that  short  period  when  political 
ideas  wTere  those  of  the  completest  individual  liberty,  — 
"  while  the  jealousy  of  power  was  strong,  and  the  love  of 
liberty  and  of  right  was  ardent."  *  "If  we  examine  the 
present  state  of  the  world,"  James  Winthrop  said,  "we 
shall  find  that  most  of  the  business  is  done  in  the  freest 
states,  and  that  industry  decreases  in  proportion  to  the 
rigor  of  government."  2  This  was  not  the  spirit  of  the 
old  regime,  when  industry  was  a  privilege  acquired  by 
license  from  government  or  by  the  election  of  a  guild,3 

1  Ruffin,  C.  J.,  in  Hoke  v.  Henderson,  4  Dev.  (N.  C.)  12  (1833). 

2  Letter  of  James  Winthrop  (Agrippa)  in  Massachusetts  Gazette,  Nov.  23, 
1787;    Ford,  "Essays  on  the  Constitution,"  53,  55. 

3  Lecky,  "Democracy  and  Liberty,"  Vol.  II,  p.  243.  See  remarks  of 
Senator  Hayne  of  South  Carolina,  April  30,  1824.  Annals  of  Congress, 
18th  Cong.,  1st  Sess.,  Vol.  I,  p.  623. 


24  THE   FEDERAL   POWER   OVER 

and  it  may  not  be  the  spirit  of  the  new  regime,  under 
which  organizations  not  unlike  the  guilds  have  arisen, 
and  the  revival  of  governmental  license  is  proposed. 
Industrial  liberty  for  the  modern  world  was  the  dis- 
covery of  the  seventeenth  and  eighteenth  centuries,  and 
its  security,  with  all  other  rights,  which  together  con- 
stitute freedom,  was  the  great  purpose  of  American 
governments. 

To  this  end  provisions  were  inserted  in  State  Consti- 
tutions, declaring  and  protecting  the  inalienable  rights 
of  man.  No  such  provisions  were  inserted  in  the  Fed- 
eral Constitution,  for  there  they  were  unnecessary.  The 
liberty  of  the  citizen  was  protected  by  the  State,  not 
by  the  United  States.  This,  said  Alexander  Contee 
Hanson,  results  from  the  nature  of  a  Federal  republic, 
which  consists  of  "  an  assemblage  of  distinct  States, 
each  completely  organized  for  the  protection  of  its 
own  citizens."  '  The  rights  of  private  citizens,  James 
Bowdoin  said,  are  not  ''the  object  or  subject  of  the 
Constitution."  2 

The  States,  then,  it  was  answered,  should  accept  the 
Constitution  upon  the  express  condition  that  nothing 
therein  deprive  a  citizen  of  the  rights  given  to  him  by 

1  "Remarks,"  published  in  Ford,  "  Pamphlets  on  the  Constitution,"  221, 
241 ;  letter  of  Elbridge  Gerry  in  Connecticut  Courant,  Dec.  10,  1787. 

2  2  Elliot  Deb.  87.  "The  American  system  rests  on  the  assertion  of  the 
equal  right  of  every  man  to  life,  liberty,  and  the  pursuit  of  happiness,  to 
freedom  of  conscience,  to  the  culture  and  exercise  of  all  his  faculties.  As  a 
consequence  the  State  government  is  limited  —  as  to  the  General  Government 
in  the  interest  of  union,  as  to  the  individual  citizen  in  the  interest  of  free- 
dom." First  annual  message  of  President  Johnson.  For  George  Ban- 
croft's part  in  the  authorship  of  this  message,  see  article  by  Professor  William 
A.  Dunning  of  Columbia  University.  "  More  Light  on  Andrew  Johnson," 
American  Historical  Review,  Vol.  11.  p.  547.  April,  1006.  Also  communica- 
tion by  Mr.  Carl  Russell  Fish,  "President  Johnson's  First  Annual  Message," 
ibid.  p.  951,  July,  1906. 


CARRIERS  AND   CORPORATIONS  25 

the  State  in  which  he  resides,1  or  the  Constitution  should 
be  amended  so  as  to  protect  every  individual  in  the  en- 
joyment of  rights  derived  from  the  States.  Such  condi- 
tional acceptance  or  amendment  was  unnecessary,  but 
to  satisfy  doubts,  not  to  alter  the  operation  of  the  Con- 
stitution,2 the  amendments  known  as  the  Bill  of  Rights 
were  proposed  in  1789  and  soon  after  adopted. 

By  these  amendments  the  provision  of  the  Constitu- 
tion giving  to  citizens  of  each  State  all  the  privileges  and 
immunities  of  citizens  of  the  several  States  3  was  sup- 
plemented by  a  long  list  of  rights  not  to  be  infringed, 
including  provisions,  not  restricted  to  the  protection  of 
citizens,  which  enact  that  no  person  —  that  is,  as  the 
word  is  construed,  no  citizen,  alien,  or  corporation  — 
shall  be  deprived  of  life,  liberty,  or  property  without  due 
process  of  law ;  that  private  property  shall  not  be  taken 
for  public  use  without  just  compensation ; 4  and  that  the 
enumeration  of  certain  rights  shall  not  be  construed  to 
deny  or  disparage  others  retained  by  the  States  or  by 
the  people.5 

What  are  the  privileges,  immunities,  liberties,  and 
rights  of  property  thus  protected?  For  these  expres- 
sions, which  have  a  long  history  in  English  law,  attempts 
have  been  made  to  establish  a  somewhat  technical  mean- 

1  See  letter  by  James  Winthrop  in  Massachusetts  Gazette,  Feb.  5,  1788, 
Ford,  "Essays  on  the  Constitution,"  119. 

2  The  preamble  adopted  with  these  amendments  by  Congress  reads : 
"  The  conventions  of  a  number  of  the  States  having  at  the  time  of  adopting  the 
Constitution  expressed  a  desire,  in  order  to  prevent  misconstruction  and 
abuse  of  its  powers,  that  further  declaratory  and  restrictive  clauses  be  added ; 
and  as  extending  the  grounds  of  public  confidence  in  the  government  will 
best  ensure  the  beneficent  ends  of  its  institution,  resolved,"  etc.  See  "Con- 
stitutionality of  the  Anti-Trust  Act,"  by  Mr.  William  D.  Guthrie,  11  Har- 
vard Laic  Review,  80,  83. 

3  Article  IV,  §  2.  4  Fifth  Amendment.  5  Ninth  Amendment. 


26  THE   FEDERAL  POWER   OVER 

ing  which  would  so  restrict  their  operation  as  only  to 
forbid  arbitrary  executions,  imprisonments,  and  for- 
feitures.1 This  view  comes  from  a  partial  consideration 
of  the  subject.  English  history  and  the  development  of 
English  law  centre  about  the  growth  of  individual  lib- 
erty. To  give  to  the  provisions  in  the  American  Con- 
stitution which  protect  individual  rights  the  meaning 
which  they  would  have  had  for  Norman  lawyers,  or 
for  lawyers  of  the  English  monarchy,  is  wholly  to  mis- 
interpret the  purposes  of  the  instrument. 

There  are,  however,  authorities  which  hold  that  even 
in  early  law  the  word  " liberty"  referred  not  merely  to 
freedom  from  arbitrary  imprisonment,  but  included  also 
industrial  liberty  so  far  as  it  existed.  "In  a  sense,  all 
the  rights  secured  by  Magna  Carta  were  l liberties';  but 
the  word  is  probably  used  here  as  equivalent  to  '  fran- 
chises/ embracing  feudal  jurisdictions,  immunities, 
and  privileges  of  various  sorts,  all  treated  by  mediaeval 
law  as  falling  within  the  category  of  property." 2 
"These  words  have  always  been  taken  to  extend  to 
freedom  of  trade."  3  From  this  beginning,  the  growth 
of  civil,  religious,  and  political  rights  may  in  part  be 
traced,  but  liberty  comes  in  part  only  from  England. 
The  American  declarations  of  rights,  Professor  Jellinek 
says,  "enumerate  a  much  larger  number  of  rights  than 
the  English  declarations,  and  look  upon  these  rights  as 
innate  and  inalienable.  Whence  comes  this  conception 
in  American  law?     It  is  not  from  the  English  law."  4 

1  "  The  Meaning  of  the  Word  Liberty,"  4  Harvard  Law  Review,  365. 

2  McKechnie,  "Magna  Carta,"  445. 

3  Parker,  C.  JT.,  in  Mitchel  v.  Reynolds,  1  P.  Wms.  181  (1711). 
*  Jellinek,  "Rights  of  Man  and  Citizens"  (Holt),  Ch.  VI,  p.  56. 


CARRIERS  AND  CORPORATIONS  27 

Partly,  perhaps,  consciously  or  unconsciously,  these 
new  rights  and  new  ideas  are  results  of  life  in  the  new 
world.  Conditions  in  America,  where  every  settler  had 
to  rely  upon  himself  for  safety  as  well  as  sustenance, 
where  relations  to  others  were  comparatively  slight  and 
to  government  hardly  felt,  made  individual  liberty  of 
the  widest  character  a  fact  of  daily  experience.  Indus- 
try as  a  privilege,  or  as  less  than  an  inalienable  right 
would  have  been  a  difficult  conception  to  introduce. 
Moreover,  "the  men  who  founded  the  American  re- 
publics, State  and  Federal,  were  not  seeking  to  imitate 
Great  Britain.  They  set  out  to  establish  institutions 
such  as  they  thought  England  ought  to  have,  and  not 
those  which  they  found  existing."  x 

Much  of  the  discussion  of  the  formative  period  seems, 
as  is  often  noticed,  to  be  of  French  rather  than  English 
origin.2  That  there  should  have  been  such  an  influ- 
ence seems  natural.  French  and  Americans  had  been 
allies,  —  their  troops  had  served  in  the  same  armies, 
men  of  the  two  nations  had  closely  associated  at  the  time 
when  the  attention  of  the  French  nation  was  absorbed 
by  political  discussions,  and  above  all  by  Rousseau.3 
American  ideas  were  carried  back  to  France  by  the 


1  Campbell,  "The  Puritan  in  Holland,  England,  and  America,"  Vol.  I, 
pp.  53-54. 

2  Morley,  " Rousseau,"  Introduction ;  Borgeaud,  "Adoption  and  Amend- 
ment of  Constitutions,"  19. 

3  "  We  have  never  seen  in  our  own  generation  —  indeed  the  world  has  not 
seen  more  than  once  or  twice  in  all  the  course  of  history  —  a  literature  which 
has  exercised  such  prodigious  influence  over  the  minds  of  men,  over  every 
cast  and  shade  of  intellect,  as  that  which  emanated  from  Rousseau  between 
1749  and  1762."  Maine,  "Ancient  Law,"  84.  Hume,  writing  from  Paris 
in  1756,  said:  "It  is  impossible  to  express  or  imagine  the  enthusiasm  of 
the  nation  in  his  favor;  ...  no  person  ever  so  much  engaged  their  atten- 
tion as  Rousseau."  Buckle,  "Hist.  Civ.  Eng.,"  Vol.  II,  pp.  330,  331,  notes 
12,  13. 


28  THE   FEDERAL  POWER   OVER 

troops  who  served  here ; *  so  that  a  declaration  of  the 
"rights  of  man"  was  known  as  "une  idee  americaine,"  2 
introducing,  in  Lafayette's  phrase,  "the  American 
era." 3  It  would  seem  inevitable  that  the  current 
French  political  discussion  should  be  introduced  into 
America,  and  that,  at  the  close  of  the  Revolution,  many 
persons  in  this  country,  like  Aaron  Burr,4  should  be 
interested  in  French  political  theories,  and  for  the  same 
reason,  —  because  introduced  to  this  literature  by 
French  friends;  yet  it  is  one  of  the  surprises  of  Ameri- 
can history  that  the  current  of  influence  at  this  time 
seems  to  have  flowed  in  one  direction  only.  America 
influenced  France,  but  it  was  not  until  later  that  France 
influenced  America.5 

It  is  quite  possible,  however,  to  trace  the  rise  of  the 
doctrines  under  whose  influence  the  Constitution  was 
formed,  without  recourse  to  France. 

The   Revolution   was  not   a   quarrel   between   two 

1  Buckle,  "Hist.  Civ.  Eng."  (N.  Y.  1894),  Vol.  II,  p.  417,  note  an. 

2  Dumont,  "Souvenirs  sur  Mirabeau,"  97. 

3  "L'ere  de  la  revolution  americaine,  qu'on  peut  regarder  comme  le  com- 
mencement d'un  nouvel  ordre  social  pour  le  monde  entier,  est  a  proprement 
parler  l'ere  des  declarations  des  droits.  ...  Ce  n'est  done  qu'apres  le  com- 
mencement de  l'ere  americaine,  qu'il  a  ete  question  de  definir  independam- 
ment  de  tout  ordre  preexistant,  les  droits  que  la  nature  a  departis  a  chaque 
homme,  droits  tellement  inherens  a  son  existence,  que  le  societe  entiere  n'a 
pas  le  droit  de  Pen  priver."  Lafayette,  "Memoirs,  Correspondances  et 
Manuscrits,"  Bruxelles,  1837,  Vol.  II,  p.  45.  Jellinek,  "Rights  of  Man 
and  of  Citizens."  See  "The  French  Declaration  of  the  Rights  of  Man," 
by  Professor  James  Harvey  Robinson,  of  Columbia  University,  Political 
Science  Quarterly,  Vol.  14,  p.  653 ;  also  the  recent  discussion  of  this  subject  in 
France,  "La  Declaration  des  Droits  de  l'Homme  et  du  Citoyen,"  Emile 
Walch  (Paris,  1903,  Henri  Jouve) ;  "Montesquieu  et  J.  J.  Rousseau,"  by  J. 
Tschernoff  (Paris,  1903,  Librarie  Marescq  Aine) ;  Boutmy,  article  in  "An- 
nates de  1  Ecole  Libre  des  Sciences  Politiques,"  1902,  p.  414. 

4  Parton,  "Life  of  Burr,"  1st  ed.,  132. 

5  "Rousseau  in  Philadelphia,"  by  Mr.  Lewis  Rosenthal,  12  Magazine  of 
American  History,  46;  Merriam,  "  American  Political  Theories  ;"  Borgeaud, 
"Adoption  and  Amendment  of  Constitutions;"  Lee,  "Letter  of  a  Federal 
Farmer,"  Ford,  Pamphlets  on  the  Constitution,  290. 


CARRIERS  AND   CORPORATIONS  29 

peoples,  but  between  two  parties,  —  the  conservatives 
in  England  and  America  on  one  side,  the  liberals  in  both 
countries  on  the  other  side.  In  England  the  party  of 
monarchy  was  successful.  In  the  colonies  democratic 
institutions  were  established,  and  it  was  for  the  preserva- 
tion of  these  institutions  that  the  war  was  fought.1 

The  political  doctrines  of  America  were  the  doctrines 
of  the  Parliamentary  party  in  England,  Puritan  in  char- 
acter, partly  of  Calvinistic  origin  and  to  this  extent  like 
much  of  Rousseau's  speculation,  derived  from  the  de- 
mocracy of  Geneva.  "The  first  indications  of  these 
religious-political  ideas  can  be  traced  far  back,  for  they 
were  not  created  by  the  Reformation.  But  the  practice 
which  developed,"  in  America,  "on  the  basis  of  these 
ideas  was  something  unique.  For  the  first  time  in 
history  social  compacts,  by  which  states  are  founded, 
were  not  merely  demanded,  they  were  actually  con- 
cluded."  2 

Instances  of  this  influence  are  found  in  the  efforts  of 
Cromwell's  army  to  establish  by  popular  vote  an  in- 
strument of  government  superior  to  the  authority  of 
Parliament;  and  in  the  statutes  adopted  in  early  days 
of  Rhode  Island  and  Connecticut  by  general  vote  of 
the  colonists.  The  idea  from  which  the  practice  grew, 
Borgeaud  says,  was  that  to  establish  government,  as 
to  found  a  congregation,  the  consent  of  all  concerned 
was  necessary.  "When  the  democratic  communities 
of  New  England  became  veritable  States,  the  Puritan 
conception,  taken  up  and  systematized  by  philosophy, 

1  "The  Revolution  Impending,"  by  Mr.  Mellen  Chamberlain,  in  "Nar- 
rative and  Critical  Historv  of  America,"  Vol.  VI,  pp.  1,  2. 

2  Jellinek,  "  Rights  of  Man,"  61,  62. 


3Q 


THE   FEDERAL  POWER   OVER 


had  become  the  theory  of  the  social  contract.  Under 
this  new  form  it  presided  over  the  formation  and  es- 
tablishment of  American  constitutions  of  the  Revolu- 
tionary period,  constitutions  whose  most  perfect  expres- 
sion was  that  adopted  by  Massachusetts  in  1780.  .  .  . 
It  was  by  virtue  of  the  formula  which  Jean  Jacques 
Rousseau  has  rendered  famous,  but  which  the  Anglo- 
Saxons  had  not  learned  from  him,  that  this  Constitu- 
tion was  submitted  to  all  the  citizens  of  the  State."  * 

The  political  writers  who  had  the  greatest  influence 
in  forming  American  opinion,  and  whose  works  were 
most  quoted  in  this  country,  were  Locke  and  Algernon 
Sidney.  The  principles  upon  which  the  American 
Revolution  was  conducted,  came  largely  from  them,2 
and  their  influence  in  the  constitutional  period  is 
strongly  marked. 

Both  of  these  writers  had  defined  liberty  and  prop- 
erty as  including  the  right  of  industry.     Locke  said :  — 

"Though  the  earth,  and  all  inferior  creatures  be  common  to 
all  men,  yet  every  man  has  a  'property'  in  his  own  'person.' 
This  nobody  has  any  right  to  but  himself.  The  'labour'  of  his 
body,  and  the  'work '  of  his  hands,  we  may  say,  are  properly  his."  3 

So  Algernon  Sidney :  — 

"Property  also  is  an  appendage  to  liberty;  and  't  is  as  impos- 
sible for  a  man  to  have  a  right  to  lands  or  goods,  if  he  has  no 
liberty,  and  enjoys  his  life  only  at  the  pleasure  of  another,  as  it  is 
to  enjoy  either,  when  he  is  deprived  of  them."  4 

1  Borgeaud,  "Adoption  and  Amendment  of  Constitutions,"  138. 

2  Fiske,  "  Critical  Period,"  64. 

3  Second  Treatise  on  Government,  Ch.  V,  §  27. 

4  "Discourses  on  Government,"  Ch.  Ill,  Sec.  16;  see,  too,  Adam  Smith, 
"Wealth  of  Nations,"  Bk.  I,  Ch.  X,  Part  II;  Thiers,  "De  la  Propriete,'^ 
36,  37- 


CARRIERS  AND   CORPORATIONS 


31 


The  American  governments  were  formed  when  the 
influence  of  this  philosophy  was  at  its  height.  James 
Iredell,  afterward  Associate  Justice  of  the  Supreme 
Court,  said  in  the  Convention  of  North  Carolina  that  he 
believed  the  passion  for  liberty  was  stronger  in  America 
than  in  any  other  country  in  the  world.1  "We  hold 
these  truths  to  be  self-evident,  that  all  men  were  created 
equal,  that  they  are  endowed  by  their  Creator  with 
certain  unalienable  rights,  that  among  these  are  life, 
liberty,  and  the  pursuit  of  happiness. "  Of  these  state- 
ments in  the  Declaration,  the  Supreme  Court  has  said 
that  while  they  "may  not  have  the  force  of  organic  law, 
or  be  made  the  basis  of  judicial  decision  as  to  the  limits 
of  rights  and  duty,  and  while  in  all  cases  reference  must 
be  had  to  the  organic  law  of  the  nation  for  such  limits, 
yet  the  latter  is  but  the  body  and  the  letter  of  which  the 
former  is  the  thought  and  the  spirit,  and  it  is  always  safe 
to  read  the  letter  of  the  Constitution  in  the  spirit  of  the 
Declaration  of  Independence."  2 

In  State  constitutions  the  doctrines  of  individual  free- 
dom were  still  more  fully  declared.  The  Bill  of  Rights 
of  Virginia,  adopted  in  1776,  secured  — 

"The  enjoyment  of  life  and  liberty,  with  the  means  of  acquiring 
and  possessing  property,  and  pursuing  and  obtaining  happiness 
and  safety." 

New  Hampshire  in  1784  and  again  in  1792  prefaced  its 
Constitution  with  the  statements  that  — 

"All  men  have  certain  natural,  essential,  and  inherent  rights, 
among  which  are  the  enjoying  and  defending  life  and  liberty,  ac- 
quiring, possessing,  and  protecting  property,  and  in  a  word,  of 
seeking  and  obtaining  happiness." 

1  Elliot  Deb.  95.         2  Gulf,  etc.,  Ry.  Co.  v.  Ellis,  165  U.  S.  150,  159-160. 


32  THE  FEDERAL  POWER   OVER 

Similar  expressions  are  in  the  constitutions  of  most 
of  the  other  States.  The  Constitution  of  Missouri  some 
years  afterward,  instead  of  referring  generally  to  the 
right  of  acquiring  and  possessing  property,  includes 
among  the  inalienable  rights  of  individuals  "life,  liberty, 
the  enjoyment  of  the  fruits  of  their  own  labor  and  the 
pursuit  of  happiness,"  a  phrase  which  was  modified  so 
as  to  protect  individuals  in  "the  enjoyment  of  the  gains 
of  their  own  industry."  Upon  this  subject  the  Consti- 
tution of  Kentucky  still  later,  in  words  which  recall 
Lafayette's  expressions,1  said  that  "absolute  power  over 
the  lives,  liberty,  and  property  of  persons  exists  nowhere 
in  a  republic,  not  even  in  the  largest  majority." 

In  all  these  broad  phrases,  law-makers  used,  not  the 
language  of  Norman  law,  but  spoke,  as  Fisher  Ames  said 
of  the  Federal  Constitution,  in  "the  language  of  philoso- 
phy." 2 

The  purpose  to  secure  individual  liberty  —  a  con- 
trolling purpose  of  the  communities  which  framed  and 
adopted  the  Constitution  —  inheres,  then,  not  only  in  its 
preamble,  but  in  the  operating  provisions  by  which  this 
purpose  was  made  effective.  Among  the  most  important 
of  these  provisions  are  those  securing  the  right  of  in- 
dustry. "The  right  to  make  contracts,"  William  H. 
Crawford  said,  "is  antecedent  to  and  independent  of 
all  municipal  law."  3  Early  in  the  history  of  the  govern- 
ment the  Federal  courts  held  that  the  privileges  and  im- 
munities of  citizenship  included  "the  right  of  a  citizen 

1  "Memoirs,  Correspondances  et  Manuscrits"  (Bruxelles,  1837),  Vol.  II, 
p.  45- 

2  2  Elliot  Deb.  155. 

3  Speech  in  Senate,  Feb.  20,  181 1;  Annals  nth  Cong.,  3d  Sess.,  pi.  340. 


CARRIERS  AND   CORPORATIONS  33 

of  one  State  to  pass  through,  or  to  reside  in  any  other 
State,  for  purposes  of  trade  ...  or  otherwise."  '  In 
Gibbons  v.  Ogden  the  Supreme  Court,  speaking  by 
Mr.  Chief  Justice  Marshall,  held  that  the  right  of  in- 
tercourse between  State  and  State  was  not  granted  by 
the  Federal  Constitution,  but  "  derives  its  source  from 
those  laws  whose  authority  is  acknowledged  by  civilized 
man  throughout  the  world."  2 

That  is,  in  other  words,  the  right  to  engage  in  inter- 
state commerce  is  part  of  the  inalienable  liberty  which, 
according  to  the  philosophy  of  that  time,  has  a  higher 
source  than  the  Constitution  itself,  and  whose  protec- 
tion is  one  of  the  chief  purposes  for  which  government  is 
instituted.  Political  theories  have  changed  since  this 
decision,  but  the  Constitution  remains,  and  the  rights 
which  it  was  formed  to  protect  still  have  its  assurance. 

Under  the  influence  of  slavery  the  meaning  of  the 
word  "liberty"  was  much  restricted.  It  proved  to  be 
true,  for  the  white  as  for  the  black,  that  the  Union  could 
not  remain  half  slave  and  half  free.  This  narrowing 
influence  is  no  longer  felt,  and  again  liberty  is  "the 
greatest  of  all  rights,"  3  including  all  rights  necessary 
for  the  maintenance  and  security  of  every  person,  and 
among  others  the  right  to  engage  in  commerce.  The 
Fourteenth  Amendment  then  marks  a  return  to  the 
earlier  constitutional  views.  It  "conferred  no  new  and 
additional  rights,  but  only  extended  the  protection  of  the 
Federal  Constitution  over  rights  of  life,  liberty,  and 

1  Corfield  v.  Coryell,  4  Wash.  C.  C.  Rep.  381;  Ward  v.  Maryland,  12 
Wall.  418,  430. 

2  9  Wheat.  1,  211. 

3  Jacobson  v.  Massachusetts,  197  U.  S.  11,  27. 


34  THE   FEDERAL  POWER   OVER 

property  that  previously  existed  under  all  State  con- 
stitutions." 1 

Under  this  amendment  liberty  "  means  not  only  the 
right  of  the  citizen  to  be  freej  from  the  mere  physical 
restraint  of  his  person,  as  by  incarceration,  but  the  term 
is  deemed  to  embrace  the  right  of  the  citizen  to  be  free 
in  the  enjoyment  of  all  his  faculties;  to  be  free  to  use 
them  in  all  lawful  ways;  to  live  and  work  where  he 
will;  to  earn  his  livelihood  by  any  lawful  calling;  to 
pursue  any  livelihood  or  avocation,  and  for  that  purpose 
to  enter  into  all  contracts  which  may  be  proper,  neces- 
sary and  essential  to  his  carrying  out  to  a  successful 
conclusion  the  purposes  above  mentioned,'' 2  and  in  so 
doing  to  move  freely  from  State  to  State.3  "The  right 
to  follow  any  of  the  common  occupations  of  life  is  an 
inalienable  right."  4 

The  right  to  engage  in  commerce  is,  then,  part  of  the 
liberty  derived  from  the  States,  which  neither  the  United 
States 5  nor  the  States 6  may  deny.  There  is  no  process 
of  law  by  which  the  right  may  be  taken.  As  the  right  is 
derived  from  State  law,7  it  belongs  to  those  to  whom  the 
State  gives  it,  whether  citizen,  alien,  or  corporation. 
The  protection  of  the  Fifth  and  Fourteenth  Amend- 
ments belongs  to  all  persons,  and  cannot  be  disregarded 

1  Mobile  &  Ohio  R.  R.  v.  Tennessee,  153  U.  S.  486,  506. 

2  Allgeyer  v.  Louisiana,  165  U.  S.  578,  589;  Pavesich  v.  New  England 
Life  Ins.  Co.,  50  S.  E.  Rep.  68;  City  of  Chicago  v.  Netcher,  55  N.  E.  Rep. 
707 ;  Kellyville  Coal  Co.  v.  Harrier,  69  N.  E.  Rep.  927 ;  Erdman  v.  Mitchell, 
56  Atl.  Rep.  327;  State  v.  Dodge,  56  Atl.  Rep.  983;  State  v.  Ashbrook,  55 
S.  W.  Rep.  627. 

3  Williams  v.  Fears,  179  U.  S.  270. 

4  Opinion  of  Mr.  Justice  Bradley  in  Butchers'  Union  Co.  v.  Crescent  City 
Co.,  in  U.  S.  746,  762,  approved  in  165  U.  S.  578,  589. 

6  Fifth  Amendment.  6  Fourteenth  Amendment. 

7  Gibbons  v.  Ogden,  9  Wheat.  1 ;   Bowman  v.  Railroad  Co.,  115  U.  S.  611. 


CARRIERS  AND   CORPORATIONS  35 

in  respect  to  those  artificial  entities  called  corporations 
any  more  than  in  respect  to  the  individuals  who  com- 
pose them.1  The  right  to  engage  in  commerce  is  a 
franchise  which,  being  granted  by  another  sovereign, 
is  beyond  Federal  jurisdiction  either  to  prohibit  or  to 
tax.2  In  this  matter  the  authority  of  the  State  is  com- 
plete, and  beyond  Federal  control,  —  a  distribution  of 
power  which  results  from  the  nature  of  a  Federal  repub- 
lic, "an  assemblage  of  distinct  States,  each  completely 
organized  for  the  protection  of  its  own  citizens."  3 

The  exercise  of  this  constitutional  right,  derived  from 
State  law,  to  engage  in  commerce,  is  necessarily  subject 
to  two  limitations.  The  first  of  these  is,  of  course,  the 
wide  Federal  jurisdiction  in  foreign  affairs.4  The 
second  limitation  is  in  the  power  of  police  regulation, 
which  belongs  to  Congress,  and  which  has  been  exer- 
cised, for  example,  in  the  statutes  forbidding  transpor- 
tation of  articles  which,  by  the  commercial  usage  of 
nations,  are  not  legitimate  subjects  of  commerce.  Con- 
gress, that  is,  has  a  discretionary  power,  within  consti- 
tutional limits,  so  to  regulate  commerce  as  to  accom- 

1  Gulf,  Colorado,  etc.,  Co.  v.  Ellis,  165  U.  S.  150,  154;  United  States  v. 
Northwestern  Express  Co.,  164  U.  S.  686,  689 ;  Covington,  etc.,  Co.  v.  Sand- 
ford,  164  U.  S.  578,  592;  Coffeyville  Vitrified  Brick  Co.  v.  Perry,  76  Pac. 
Rep.  848 ;  State  v.  Missouri  Tie  Co.,  80  S.  W.  Rep.  933.  "Every  individual 
or  entity  which  has  rights  or  the  capacity  to  owe  duties  is  a  person.  In 
the  strict  legal  sense  the  word  person  refers  to  the  capacity,  character  or 
status  of  the  being  rather  than  to  the  man  or  entity."  James  Wilson's 
Works,  Vol.  II,  p.  3,  note  1.     1  Austin's  Jurisprudence  362. 

2  Louisville,  etc.,  Co.  v.  Kentucky,  188  U.  S.  385;  Pacific  Railroad  Cases, 
127  U.  S.  1,  40. 

3  A.  C.  Hanson,  "Remarks,"  published  in  Ford,  "Pamphlets on  the  Con- 
stitution," 221,  241. 

4  "  Every  person  by  the  common  law  of  each  State,  may  export  his  prop- 
erty to  foreign  countries,  at  pleasure;  but  Congress^  in  pursuance  of  the 
power  of  regulating  trade,  may  prohibit  the  exportation  of  commodities," 
etc.     Hamilton,  Opinion  on  Bank  Bill,  Feb.  23,  1791. 


36  THE   FEDERAL   POWER  OVER 

plish  the  purposes  for  which  the  Federal  jurisdiction 
was  created.  Carriers  may  be  required  to  give  rest, 
water,  and  food  to  live  stock;  transportation  of  infected 
articles  may  be  forbidden,  and  impediments  to  inter- 
course among  the  States  may  be  removed.  In  all  this 
legislation,  however,  there  is  no  question  of  the  person 
for  or  by  whom  commerce  is  conducted.  The  subject 
regulated  is  that  portion  of  commerce  given  to  Congress, 
and  in  the  exercise  of  this  power,  as  in  the  exercise  of  its 
other  powers,  Congress  is  subject  to  all  the  limitations 
imposed  by  the  Constitution.1  Congress  cannot  de- 
prive any  person  of  liberty,  exclude  proper  articles 
from  interstate  transportation,2  nor  distinguish  between 
proper  occupations  by  reason  of  the  personality  of 
shipper  or  consignee.  Some  rights  in  every  free  gov- 
ernment are  beyond  control  of  the  state.  "A  govern- 
ment which  recognized  no  such  rights,  which  held  the 
lives,  the  liberty,  and  the  property  of  its  citizens  subject 
at  all  times  to  the  absolute  disposition  and  unlimited 
control  of  even  the  most  democratic  depository  of  power, 
is  after  all  but  a  despotism."  3 

The  two  powers,  State  and  Federal,  must,  in  the  lan- 
guage of  Senator  Wells,  "keep  company,' '  and  "every 
application  of  .  .  .  power,  by  the  United  States,  which 
has  a  tendency  to  embarrass  or  impair  the  free  exercise 
of  the  power  reserved  to  the  States,  is  unwarranted,  and 

1  Monongahela  Navigation  Co.  v.  United  States,  148  U.  S.  312,  336. 

2  Ex  parte  Jackson,  96  U.  S.  727,  735;  In  re  Rapier,  143  U.  S.  no,  133; 
Speech  of  Wm.  M.  Evarts  in  Senate,  Jan.  13,  1887,  Cong.  Rec,  49th  Cong., 
2d  Sess.,  Vol.  XVIII,  Part  1,  p.  603. 

3  Loan  Association  v.  Topeka,  20  Wall.  655,  662 ;  Opinion  of  Justice 
Beck  in  Hanson  v.  Vernon,  27  Iowa  28,  73,  approved  in  State  v.  Mayor,  etc., 
of  Des  Moines,  103  Iowa  76. 


CARRIERS  AND   CORPORATIONS  37 

if  done  .  .  .  with  a  view  to  such  a  purpose,  is  the  affair 
of  arrogance  and  usurpation."  1 

Taxation  of  imports  and  exports.  Under  the  Con- 
stitution as  originally  formed,  and  for  many  years 
administered,  Congress  had  no  jurisdiction  over  trans- 
portation from  State  to  State  save  as  conducted  by  coast- 
wise navigation.2  Interstate  transportation  was  left 
to  the  States,  Congress  being  forbidden  to  tax  articles 
exported  from  any  State  and  the  States  forbidden  to 
tax  imports  or  exports.  The  restriction  upon  the  States, 
Randolph  said,  Congress  might  keep  "  undiminished  "  in 
operation  by  legislation  under  the  commerce  clause,  but 
beyond  this,  Federal  power  did  not  extend.  Congress 
being  then  without  jurisdiction  over  carriage  among  the 
States,  there  was  no  need  to  provide  that  it  should  not 
tax  or  prohibit  such  transportation,  for  Congress  had 
no  power  to  which  such  a  restriction  could  apply. 

Federal  power,  then,  never  extended  so  far  as  to 
enable  Congress  to  close  interstate  roads ;  but  this 
defect  of  power  is  not  all.  Besides  this,  Congress  is 
subject  to  the  express  provision  forbidding  taxation  of 
exports,  and  this  provision  should  not  only  prevent 
taxation  of  the  goods  carried,  but  should  forbid  taxa- 
tion of  interstate  transportation,3  and  as  applied  to 
interstate  commerce  may  well  be  held  to  prevent  Federal 
prohibition. 

The  rule  of  the  Constitution  was  free  ships  and  free 
goods.     Congress  was,  indeed,  permitted  to  tax  imports 

1  Senator  Wm.  H.  Wells,  of  Delaware,  April  1,  181 6,  Annals  14th  Cong., 
1st  Sess.,  Vol.  I,  p.  259. 

2  Post,  Chapter  III.  3  State  Freight  Tax  Case,  15  Wall.  232. 


38  THE   FEDERAL  POWER  OVER 

from  abroad.  It  was  intended  to  raise  a  Federal  revenue 
under  the  Constitution  from  a  tariff  upon  foreign  com- 
merce, but  upon  commerce  among  the  States  no  tax 
could  be  laid.  The  Southern  States  were  not  interested 
in  the  carrying  trade,  but  were  vitally  interested  in 
preserving  access  to  the  markets  of  the  world  for  their 
staple  products.  Their  most  important  market  was 
Europe,  and  foreign  commerce  was  chiefly  considered 
in  the  debates ;  but  even  then  the  South  contemplated 
the  time  when  Northern  States  would  be  an  important 
market,  and  the  reason  for  prohibiting  Federal  taxation 
of  exports  was,  said  a  member  of  the  Convention,  in 
order  that  the  planter  should  "  receive  the  true  value 
of  his  product  wherever  it  may  be  shipped."  i 

All  this  would  probably  be  accepted  without  question, 
were  it  not  for  the  opinion  rendered  by  the  Supreme 
Court  in  1868  in  the  case  of  Woodruff  v.  Parham.2 
This  case  holds  that  a  State  may  tax  articles  brought 
from  other  States  while  still  in  first  hands  and  original 
packages.  The  rule  is  necessary.  Under  any  other, 
as  the  Court  said,  a  "merchant  of  Chicago  who  buys 
his  goods  in  New  York  and  sells  at  wholesale  in  the 
original  packages,  may  have  his  millions,  employed  for 
half  a  lifetime,  and  escape  all  State,  county,  and  city 
taxes;  for  all  that  he  is  worth  is  invested  in  goods  which 
he  claims  to  be  protected  as  imports  from  New  York." 

It  would  have  been  sufficient  answer  to  such  a  claim 
had  the  Court  applied  to  this  clause  the  interpretation 
which  is  now  placed  upon  the  commerce  clause  in  cases 

1  Williamson  in  State  Gazette  of  North  Carolina,  Ford,  "  Essays  on  the 
Constitution,"  393.  2  8  Wall.  123. 


CARRIERS  AND   CORPORATIONS  39 

involving  State  taxation,  and  held  that  goods  can  claim 
no  preference  from  equal  burdens  by  reason  of  foreign 
origin  or  because  brought  from  another  State.  Adapt- 
ing the  language  used  in  another  connection  1  it  may  be 
said  that  a  provision  forbidding  taxation  of  articles 
brought  from  other  States  or  countries  "does  not  re- 
quire that  any  bounty  be  given  therefor."  The  Court, 
however,  went  further  than  this  and  held  that  the  words 
" imports"  and  " exports"  applied  only  to  foreign 
trade,  a  rule  which  has  been  followed  in  later  cases.2 
"It  is  not  too  much  to  say,"  Mr.  Justice  Miller 
remarked  in  delivering  the  opinion  of  the  Court, 
and  referring  to  the  debates  of  the  constitutional 
period,  "that,  so  far  as  our  research  has  extended, 
neither  the  word  export,  import,  or  impost  is  to  be 
found  in  the  discussions  on  this  subject,  as  they  have 
come  down  to  us  from  that  time,  in  reference  to  any 
other  than  foreign  commerce,  without  some  special 
form  of  words  to  show  that  foreign  commerce  is  not 
meant."  3 

This  decision,  from  which  Mr.  Justice  Nelson  dis- 
sented, completely  reversed  the  rule  which  up  to  that 
time  had  generally  been  accepted.  Mr.  Chief  Justice 
Marshall 4  and  Mr.  Justice  Story 5  had  both  understood 
the  words  to  include  foreign  and  interstate  commerce 
alike,  and  the  Supreme  Court  itself,  in  a  decision  ren- 

1  Cornell  v.  Coyne,  192  U.  S.  426. 

2  Hinson  v.  Lott,  8  Wall.  148;  Brown  v.  Houston,  114  U.  S.  622;  Pitts- 
burg Coal  Co.  v.  Louisiana,  156  U.  S.  590;  Fairbank  v.  United  States,  181 
U.  S.  283;  Preston  v.  Finley,  72  Fed.  Rep.  850;  State  v.  Pittsburg,  etc, 
Coal  Co.,  41  La.  Ann.  465 ;  Ex  parte  Martin,  7  Nev.  140. 

3  Woodruff  v.  Parham,  8  Wall.  123,  136. 

4  Brown  v.  Maryland,  12  Wheat.  445. 

5  "Commentaries  on  the  Constitution,"  §  1016. 


4Q 


THE   FEDERAL  POWER   OVER 


dered  by  Mr.  Chief  Justice  Taney,  had  so  applied  them.1 
In  some  respects  time  and  experience  of  the  workings 
of  the  Constitution  give  later  generations  better  oppor- 
tunities for  practical  understanding  of  that  instrument 
than  were  open  to  its  framers,  but  it  is  not  likely  that 
in  1868  the  language  of  the  Constitution  could  better 
be  understood  than  in  earlier  times.  The  definitions 
given  by  Mr.  Justice  Miller,  therefore,  have  not  gener- 
ally been  accepted  as  convincing. 

"  Before  the  adoption  of  the  Constitution,  and  there- 
fore at  the  time  when  it  was  framed,  and  its  phraseol- 
ogy discussed,  an  article  brought  from  Pennsylvania  to 
North  Carolina  would  have  been  said  to  be  imported 
into  North  Carolina,  and  a  tax  on  it  would  have  been 
called  an  '  import  tax.'  It  is  difficult  to  say  by  what 
other  name  such  a  tax,  if  it  could  be  laid,  would  be  now 
styled."  2  Members  of  the  Supreme  Court  have  ex- 
pressed the  same  view.  Mr.  Chief  Justice  Fuller,  in  a 
dissenting  opinion  in  which  Justices  Brewer,  Shiras, 
and  Peckham  agreed,  said  that  although  this  provision 
of  the  Constitution  had  been  restricted  in  application 
to  exports  to  a  foreign  country  "it  was  plainly  intended 
to  apply  to  interstate  exportation  as  well."  3  Notwith- 
standing these  dissenting  views,  the  decisions 4  indicate 
that  the  rule  which  in  Woodruff  v.  Parham  was  applied 
to  the  clause  forbidding  the  States  to  tax  exports  and 
imports,  may  also  be  applied  to  the  clause  forbidding 

1  Almy  v.  California,  24  How.  169. 

2  American  Fertilizing  Co.  v.  Board  of  Agriculture,  43  Fed.  Rep.  609,  612. 

3  Lottery  Case,  188  U.  S.  321,  373. 

4  Turpin  v.  Burgess,  117  U.  S.  504;  Dooley  v.  United  States,  183  U.  S. 
151,  154;  Cornell  v.  Coyne,  192  U.  S.  418,  427;  American  Steel  &  Wire  Co. 
v.  Speed,  192  U.  S.  500. 


CARRIERS  AND   CORPORATIONS  41 

Congress  to  tax  exports  from  any  State,  although  this 
clause  is  so  worded  as  apparently  to  exclude  such  con- 
struction. In  view  of  these  dissensions  the  wording  of 
the  provision  deserves  attention. 

When  a  governmental  power  over  imports  and  exports 
is  discussed,  the  words  naturally  refer  to  the  territorial 
boundaries  of  the  government  whose  powers  are  con- 
sidered. Thus  the  New  York  statutes  speak  of  articles 
manufactured  in  the  city  of  Hudson  "or  imported  or 
brought  into  the  said  city  from  any  place  whatsoever,"  * 
and  similar  references  are  made  to  importations  into  the 
city  of  Albany,2  to  exportations  from  Albany,  Saratoga, 
or  Rensselaer  counties  to  points  south  of  Albany,3  and 
to  exports  from  Suffolk,  Kings,  and  Queens  counties.4 
In  all  these  cases  the  words  "imports"  and  "exports" 
relate  to  county  and  municipal  boundaries.  The  English 
statutes  speak  of  exportations  from  a  particular  port, 
and  as  so  used  the  word  refers  to  all  goods  taken  out 
of  that  port,  including  those  carried  in  the  conduct  of 
the  coasting  trade  to  other  ports  in  England.5  To  pro- 
hibit a  State  in  general  terms  to  tax  imports  or  exports 
would,  therefore,  in  the  natural  meaning  of  the  words, 
refer  to  the  territorial  boundaries  of  the  power  thus 
limited  and  would  forbid  taxing  articles  carried  across 
State  lines.  A  similar  restriction  upon  the  power  of 
the  Federal  government  would  forbid  taxing  articles 
carried  across  national  lines.     If  it  were  sought  to  ex- 

1  Act  of  Jan.  26,  1793,  Laws  of  1 789-1 796,  Ch.  22,  p.  414. 

2  Act  of  April  3,  1790,  ibid.  Ch.  47,  p.  175. 

3  Act  of  April  3,  1797,  Laws  of  1797-1800,  Ch.  94,  p.  128. 

4  Act  of  April  4,  1800,  Laws  of  1 797-1800,  Ch.  93,  p.  547. 

5  Muller  v.  Baldwin,  L.  R.  9  Q.  B.  457;  Barrett  v.  Stockton,  etc.,  R.  Co. 
2M.&G.  163;  3M.&G.  956;   11  CI.  &F.  590. 


42  THE   FEDERAL   POWER   OVER 

tend  this  prohibition  so  as  to  prevent  Federal  taxation 
of  articles  carried  across  State  lines,  the  wording  of  the 
prohibition  should  be  made  with  specific  reference  to 
the  boundaries,  not  of  the  Federal  government,  but  of 
the  States.  This  in  fact  is  the  form  of  the  constitutional 
limitation  upon  Federal  power. 

The  States  are  forbidden  in  general  terms  to  lay  any 
tax  or  duty  upon  imports  or  exports,  while  upon  the 
powers  of  the  Federal  government  the  limitation  is  made 
with  express  reference  to  State  boundaries.  No  tax  or 
duty,  it  is  said,  shall  be  laid  by  Congress  "upon  articles 
exported  from  any  State."  Here,  then,  the  Constitu- 
tion used  such  a  special  form  of  words  as  the  Court  in 
Woodruff  v.  Parham  considered  appropriate  to  designate 
commerce  among  the  States. 

Verbal  criticism  apart,  however,  it  appears  that  in  the 
common  use  of  the  terms,  so  far  as  concerned  jurisdic- 
tion over  goods  carried  across  State  lines,  each  State  at 
the  time  of  the  formation  of  the  Constitution  was  foreign 
to  every  other.1  All  commerce,  then,  except  that  which 
was  entirely  within  each  State,  was  foreign  commerce. 
In  Massachusetts,  for  example,  where  several  statutes 
required  inspection  of  lumber  shipped  "for  exportation 
to  foreign  markets"  or  " exported  beyond  sea,"  it  was 
enacted  on  March  16,  1784,  that  this  term  "  shall  be 
considered  and  understood  to  extend  to  any  port  or 
place  not  within  this  Commonwealth."  This  statute 
does  not  purport  to  amend  the  acts  to  which  it  refers, 
nor  to  alter  their  application,  but  solely  to  define  the 
terms  employed.     The  word   " foreign"  was  capable 

1  Commonwealth  v.  King,  i  Whart.  (Pa.)  448. 


CARRIERS  AND  CORPORATIONS  43 

of  different  meanings,  of  which  Massachusetts  adopted 
the  broadest.  Under  this  construction  even  the  rule  of 
Woodruff  v.  Parham  would  apply  the  constitutional 
restrictions  upon  State  and  Federal  power  to  interstate 
as  well  as  to  international  commerce.  In  general,  the 
words  " imports"  and  "exports"  when  used  without 
express  restriction  appear  in  Massachusetts  to  have 
included  all  trade  crossing  the  State  line.1 

That  the  Massachusetts  rule  prevailed  also  in  other 
States  is  shown  by  the  construction  placed  upon  the  Penn- 
sylvania statute  of  1759  for  the  inspection  of  lumber. 

This  statute,  after  reciting  that  "the  reputation  of  this 
province  hath  been  much  advanced  by  the  care  of  the 
legislature  to  prevent  frauds  and  abuses  in  divers  com- 
modities of  our  country  produce  exported  to  foreign 
markets,"  proceeds  to  enact  among  other  things  "that 
no  merchant  .  .  .  shall  .  .  .  take  or  put  on  board  any 
ship  or  vessel  for  exportation  out  of  this  province,  any 
staves,  heading,  boards,  planks,  or  lumber"  before 
inspection  thereof  as  provided  by  the  statute. 

In  Shuster  v.  Ash,2  decided  by  the  Supreme  Court  of 
Pennsylvania  in  1824,  it  was  held  that  this  statute, 
although  enacted  in  avowed  contemplation  of  "foreign 
markets,"  applied  to  a  shipment  of  staves  from  Phila- 
delphia to  Wilmington.    The  court  said:  — 

"It  cannot  be  denied  that  the  case  falls  within  the  words  of  the 
law,  because,  although  the  proprietaries  of  Pennsylvania  were 
also  proprietaries  of  the  three  lower  counties  of  New  Castle,  Kent, 

1  Act  of  July  11,  1783,  Perpetual  Laws,  Vol.  I,  p.  103;  Act  of  March  31, 
1788,  ibid.  p.  415;  Act  of  Feb.  26,  1794,  ibid.  Vol.  II,  p.  336;  Act  of  Feb. 
27,  1795,  ibid.  p.  272. 

2  11  S.&R.  90. 


44  THE  FEDERAL  POWER  OVER 

and  Sussex  on  the  Delaware,  and  both  were  under  the  same  gov- 
ernor, yet  the  legislatures  of  the  province  and  counties  were,  in  the 
year  1759,  totally  independent  of  each  other,  and  so  continued  until 
the  Revolution  in  1776,  when  each  became  a  sovereign,  indepen- 
dent State.  But,  it  is  contended,  that  the  intent  of  the  act,  is 
explained  by  the  preamble,  which  is  confined  to  an  exportation  to 
foreign  markets.  If  the  question  had  rested  on  the  expression 
foreign  markets,  the  defendant  would  have  had  much  to  say  for 
himself,  though  even  then,  it  would  not  have  been  far  from  diffi- 
culty. A  country  governed  by  the  same  king  would  not,  strictly 
speaking,  be  a  foreign  country.  And  yet  without  doubt  an  expor- 
tation to  the  British  West  India  Islands,  must  have  been  con- 
sidered as  within  the  provision  of  the  act,  because  the  principal 
markets  for  staves,  etc.  were  in  those  islands,  and  yet,  they  were 
subject  to  the  same  king  as  Pennsylvania.  Construing  the  word, 
foreign,  with  greater  latitude,  it  might  extend  to  all  countries  beyond 
sea,  without  considering  whether  subject  to  the  same  sovereign 
or  not,  and  carrying  its  signification  to  its  utmost  extent,  it  might 
include  all  countries  and  governments,  other  than  the  province  of 
Pennsylvania,  wherever  situate.  The  main  intent  of  the  act  was, 
to  make  Pennsylvania  staves  more  valuable  by  keeping  up  their 
character  in  consequence  of  their  quality.  The  same  observa- 
tion applies  to  all  other  articles,  which  by  various  laws  were  made 
subject  to  inspection,  —  such  as  bread  and  flour,  beef  and  pork, 
butter  and  lard,  bark,  fish,  flaxseed,  etc.  I  have  examined  all 
these  acts  and  they  are  expressed,  pretty  much  as  the  one  now  under 
consideration.  They  prohibit  exportation  out  of  the  province,  or 
(since  the  Revolution,)  out  of  the  State.  The  words,  out  of  the 
province  are  so  plain,  that  they  seem  manifestly  intended  to  define 
the  limits  beyond  which  all  markets  should  be  deemed  foreign 
markets.  Unless  we  adhere  to  the  line  prescribed  by  the  act,  (the 
boundary  of  the  province,)  where  are  we  to  stop,  and  what  ex- 
ceptions are  we  to  make  ?  New  Jersey  is  as  near  to  us  as  Delaware 
—  and  Maryland  joins  both  Delaware  and  Pennsylvania.  The 
counsel  for  the  plaintiff,  says,  that  none  of  the  old  thirteen  colonies 
of  Great  Britain,  which  afterwards  confederated  and  established 


CARRIERS  AND   CORPORATIONS  45 

their  independence,  could  be  called  foreign  markets  within  the 
meaning  of  this  act  of  assembly.  Now  see  to  what  this  would  lead. 
Pennsylvania  exported  large  quantities  of  flour,  to  the  eastward 
and  southward  —  to  Massachusetts  and  the  Carolinas.  Was  it 
not  of  great  importance,  that  the  character  of  her  staple,  should  be 
kept  up  in  those  markets  ?  And  is  it  not  of  great  importance  still  ? 
The  coasting  trade  is  of  immense  value.  .  .  . 

"So  that  we  shall  find,  upon  reflection,  that  our  ancestors  knew 
what  they  were  doing  when  they  used  the  words  out  of  the  province, 
and  this  will  appear  more  clearly  when  we  advert  to  an  act  passed 
in  the  year  1721,  'For  the  well  tanning  and  currying  of  leather,' 
etc.  This  act  declares  'that  it  shall  not  be  lawful  for  any  person 
or  persons  to  lade,  ship,  or  carry,  in  any  ship  or  vessel  .  .  .  with 
intent  to  transport,  or  convey  the  same  to  any  place  or  places  out 
of  the  province,  except  such  as  may  be  carried  to  the  province  of 
New  Jersey,  and  counties  of  New  Castle,  Kent  and  Sussex  on 
Delaware'  .  .  .  etc.,  etc.  This  shows  that  the  Legislature  con- 
sidered New  Jersey,  and  the  counties  on  Delaware,  as  embraced 
by  the  expressions  out  of  the  province,  and,  therefore  it  was,  that 
they  expressly  excepted  them. 

"The  other  colonies,  pursued,  in  their  inspection  laws,  the  same 
policy  as  Pennsylvania.  Each  took  care  of  itself,  and  considered 
its  neighbors  quo  ad  hoc  as  foreigners.  The  counsel  for  the  plaintiff 
cited  the  laws  of  Connecticut  with  respect  to  beef  and  pork.  And 
I  have  examined  the  act  for  the  inspection  of  tobacco,  passed  in 
Maryland  in  the  year  1763.  The  words  are  these,  'all  tobacco 
which  shall  be  exported  out  of  this  province  shall  be  .  .  .  in- 
spected.'" 

This  stringent  rule  which  made  all  States  foreign  was 
perhaps  not  invariable.  An  exception  is  suggested  by 
comparing  three  statutes  passed  by  the  State  of  New 
York  in  March,  1787.  These  statutes  are  similar  in 
form.     The  first,1  after  reciting  that  "  butter  and  hogs' 

1  Act  of  March  1,  1788,  Laws  1 785-1 788,  Ch.  53,  p.  717. 


46  THE   FEDERAL  POWER  OVER 

lard  have  become  articles  of  great  exportation  from  this 
State,  and  it  is  necessary  the  exportation  thereof  be  regu- 
lated," makes  provision  for  inspection  of  butter  and  lard 
to  be  "exported  from  this  State."  The  second  statute  1 
provides  for  inspection  of  beef  and  pork.  The  third,2 
passed  on  the  same  day  with  the  second,  after  reciting 
that  "  staves  and  heading  have  become  articles  of  con- 
siderable exportation  from  this  State,  and  it  is  necessary 
that  great  care  be  taken  to  preserve  their  reputation  at 
foreign  markets,"  enacts  that  "no  staves  or  heading  shall 
be  exported  out  of  this  State  to  any  foreign  market,  but 
such  as  shall  be  culled  .  .  .,"  etc. 

The  difference  in  the  wording  of  statutes  otherwise  so 
much  alike  appears  to  indicate  that  the  word  "foreign" 
in  this  instance  was  employed  to  prevent  the  application 
of  the  general  terms  in  the  statute  to  commerce  with 
other  States.  That  the  words  when  used  in  the  New 
York  statutes  without  such  limitation  would  apply  to  in- 
terstate trade  is  shown  by  the  Act  of  March  22,  1784,3 
imposing  duties  in  general  terms  "on  the  importation  of 
certain  goods,  wares  and  merchandise,"  but  excepting 
the  product  "of  the  United  States  of  America  or  any  of 
them."  Similar  provisions  exist  in  other  statutes,4  and 
unless  limited  the  words  ordinarily  applied  to  all  im- 
ports and  exports,  —  foreign  or  interstate.5 

In  Connecticut  a  duty  of  twopence  was  imposed  "for 


1  Act  of  March  7,  1788,  ibid.  Ch.  55,  p.  719.  2  Ibid.  Ch.  56,  p.  723. 

3  Laws  of  1 777-1 784,  Ch.  10,  p.  599. 

4  Act  of  April  11,  1787,  Laws  of  1 785-1 788,  Ch.  81,  p.  509;  Act  of  March 
12,  1788,  ibid.  Ch.  72,  p.  786. 

5  Act  of  March  16,  1785,  Laws  of  1 785-1 788,  Ch.  35,  p.  66;  Act  of  May 
4,  1786,  ibid.  Ch.  61,  p.  320;  Act  of  April  2,  1799,  Laws  of  1 797-1800,  Ch.  88, 
P-  439- 


CARRIERS   AND   CORPORATIONS  47 

every  gallon  of  rum  .  .  .  imported"  into  the  State. 
That  this  general  law  applied  to  interstate  trade  is 
shown  by  the  fact  that  an  allowance  was  made  for 
wastage  in  transit  which  was  fixed  at  "five  per  cent, 
for  rum  imported  directly  from  the  West  Indies,  and 
two  per  cent,  for  rum  imported  from  the  neighboring 
States."  '  This  law  was  subsequently  amended  so  that 
no  duty  was  payable  on  rum  not  sold  in  the  State,  "  pro- 
vided, nevertheless,  that  nothing  in  this  Act  shall  be  con- 
strued to  exempt  rum  exported  out  of  this  State  north- 
ward by  way  of  Connecticut  River,"  etc.2  In  other 
words,  Connecticut  taxed  the  traffic  of  Western  Massa- 
chusetts, Vermont,  and  New  Hampshire,  but  did  not 
intend  to  drive  from  its  ports  commerce  on  its  way  to 
New  York  and  Rhode  Island. 

The  same  meaning  of  the  words  "exports"  and  "im- 
ports" appears  in  many  other  statutes,  of  which  but  a 
few  need  be  cited.3 

The  constitutional  provision  must,  then,  have  been 
intended,  as  was  said  by  Mr.  Justice  McLean,  to  pro- 
hibit Federal  taxation  of  interstate  commerce.  "A 
revenue  to  the  general  government  could  never  have  been 
contemplated  from  any  regulation  of  commerce  among 
the  several  States.  Countervailing  duties,  under  the 
Confederation,  were  imposed  by  the  different  States  to 
such  an  extent  as  to  endanger  the  confederacy.     But  this 

1  Laws  of  1786,  p.  210.  2  Ibid.  p.  326. 

3  Connecticut,  Laws  of  1786,  p.  245 ;  Laws  of  1796,  p.  321.  New  Hamp- 
shire, Act  of  June  21,  1785;  Laws  of  1792,  p.  313;  Act  of  Dec.  28,  1791; 
Laws  of  1797,  p.  381.  Virginia,  Act  of  Dec.  26,  1792;  Laws  of  1803, 
pp.  241-242,  sec.  3;  Act  of  Dec.  28,  1795;  Laws  of  1803,  p.  352;  Act  of 
Jan.  27,  1802;  Laws  of  1803,  p.  430.  South  Carolina,  "Imposts"  Act  of 
Dec.  12,  1795. 


48  THE   FEDERAL   POWER   OVER 

cannot  be  done  under  the  Constitution  by  Congress,  in 
whom  the  power  to  regulate  commerce  among  the 
States  is  vested."  * 

Nature  of  the  federal  power.  From  the  foregoing  re- 
view, it  appears  that  the  right  to  engage  in  commerce  is 
derived  from  the  States  and  that  though  Congress  is 
given  a  power  of  regulation,  it  was  nevertheless  in- 
tended that  the  right  itself  should  be  beyond  any  govern- 
mental invasion,  —  an  element  of  personal  liberty  which 
the  States  could  not  deny  nor  the  United  States  impair. 

It  is  obvious,  however,  that  there  is  a  difference  in  the 
nature  of  Federal  powers  over  foreign,  Indian  and  in- 
terstate commerce.  That  Federal  authority  over  these 
three  branches  of  commerce,  being  given  in  the  same 
words  and  in  the  same  clause,  is  co-extensive,  has  often 
been  assumed  both  in  Congress 2  and  sometimes  in 
opinions  of  members  of  the  Supreme  Court.3  This 
view  is,  however,  inconsistent  with  the  express  provisions 
of  the  Constitution  and  with  the  general  scheme  of  the 
instrument. 

The  States  of  the  Union  are  not  known  to  foreign 
nations.     So  far  as  relates  to  other  countries,  American 

1  McLean,  J.,  in  License  Cases,  5  How.  (U.  S.)  504,  594;  Taney,  C.  J., 
in  Passenger  Cases,  7  How.  479,  480;  Woodbury,  J.,  ibid.  549. 

2  Speech  of  John  Sergeant  of  Pennsylvania  in  House,  Feb.  26,  1828, 
Cong.  Deb.,  Vol.  IV,  Part  II,  1642-1643;  William  Smith  of  South  Carolina 
in  Senate  April  n,  1828,  Cong.  Deb.,  Vol.  IV,  Part  I,  647;  Taylor  of  Vir- 
ginia in  Senate,  April  22,  1824,  Annals  18th  Cong.,  1st  Sess.,  Vol.  I,  561; 
Louis  McLane  of  Delaware  in  House,  Jan.  27,  1824,  Annals  18th  Cong., 
1st  Sess.,  Vol.  I,  1222-1224;  Gold  of  New  York  in  House,  Annals  14th 
Cong.,  2d  Sess.,  878.  Daniel  Sheffey  of  Virginia  in  House,  February,  181 7, 
Annals  14th  Cong.,  2d  Sess.,  889. 

3  License  Cases,  5  How.  577,  578 ;  United  States  v.  43  Gallons  of  Whiskey, 
93  U.  S.  194;  Crutcher  v.  Kentucky,  141  U.  S.  47;  Buttfield  v.  Stranahan, 
192  U.  S.  470;   United  States  v.  Popper,  98  Fed.  423. 


CARRIERS  AND   CORPORATIONS  49 

commerce  is  national  in  character,  and  is  conducted 
under  Federal  authority  and  protection  alone.1 

In  foreign  relations  the  general  government  stands  in 
the  place  of  and  represents  every  State  for  every  na- 
tional purpose.  It  may  exercise  its  control  over  foreign 
commerce  to  retaliate  upon  an  unfriendly  nation,  or  in- 
jure an  enemy;  to  influence  international  negotiations, 
or  to  avoid  being  drawn  into  unnecessary  quarrels.  An 
embargo  of  foreign  commerce  may,  therefore,  be  proper, 
for  the  Federal  government,  if  compelled  to  grant  or  to 
continue  its  authority  and  protection  in  all  conditions, 
could  not  control  its  own  foreign  relations.2 

As  to  commerce  among  the  States,  no  such  consid- 
erations arise.3  Here  the  subject  is  presented  solely  as 
between  the  individual,  and  State  and  Federal  govern- 
ments. It  is  not  affected  by  international  considera- 
tions, nor  does  the  United  States  in  these  relations  take 
the  place  of,  or  represent,  a  State  or  State  laws. 

This  difference  between  the  powers  of  regulation  over 
foreign  and  over  interstate  commerce  has  been  recog- 
nized from  the  beginning. 

Madison,  reviewing  in  the  Federalist  the  objects 
to  be  accomplished  by  the  new  Constitution,  mentions, 
after  protection  against  foreign  enemies,  the  "  regulation 
of  intercourse  with  foreign  nations"  —  a  power  to  be 
exercised  by  taxation,  exclusion,  and,  where  necessary, 
retaliation  —  and  the  "  maintenance  of  harmony  and 
proper  intercourse  among  the  States."     In  other  words, 

1  Lord  v.  S.  S.  Co.,  102  U.  S.  541. 

2  Federalist,  No.  11. 

3  See  speech  of  William  H.  Crawford  in  Senate,  Feb.  11,  181 1,  Annals 
nth  Cong.,  3d  Sess.,  139. 


50  THE   FEDERAL  POWER   OVER 

the  power  of  regulation,  however  broad  it  might  be  in 
relation  to  foreign  commerce,  meant,  as  among  the 
States,  a  power  to  maintain  intercourse.1  Its  purpose  as 
elsewhere  stated  in  the  Federalist  was  "to  establish  an 
unrestrained  intercourse  between  the  States,"  2  "on  the 
basis  of  equal  privileges."  3  This,  very  clearly,  was 
the  intention  of  the  framers  of  the  Constitution,4  and  the 
history  of  the  exercise  of  these  powers  emphasizes  the 
necessary  difference  between  them. 

In  regulating  foreign  commerce,  the  national  power  is 
limited  by  the  equal  power  of  the  foreign  government. 
In  interstate  commerce,  Congress  is  limited  by  the  con- 
stitutional rights  of  citizens.  In  Indian  commerce,  nei- 
ther of  these  limitations  appears,  and  the  Federal  power 
is  as  nearly  as  possible  without  restriction.  These  dis- 
tinctions, which  are  obvious,  show  that  the  language  of 
the  Court,  in  the  cases  to  which  reference  has  been  made, 
was  not  intended  for  general  application,  but  in  each 
case  was  used  with  regard  only  to  the  facts  then  before 
the  Court.  It  is  common  knowledge  that  there  are 
respects  in  which  the  powers  differ.  Chinamen  may 
be  excluded  from  California,  and  Indians  may  be  for- 
bidden to  go  to  Texas,5  but  over  citizens  no  such  powers 
exist.  Members  of  the  Supreme  Court  when  the  subject 
has  arisen,  have  called  attention  to  the  difference:  — 

1  Speech  of  John  Randolph  in  House,  Jan.  30,  1824,  Annals  18th  Cong., 
1st  Sess.,  Vol.  I,  p.  1299;  Senator  Morgan,  May  28,  1890,  Cong.  Rec,  51st 
Cong.,  1st  Sess.,  Vol.  21,  Part  6,  p.  5369;  speech  of  William  M.  Evarts 
in  Senate,  Jan.  13,  1887,  49th  Cong.,  2d  Sess.,  Vol.  18,  Cong.  Rec,  Part  I, 
p.  603. 

2  No.  41. 

3  Federalist,  No.  11. 

4  Federalist,  No.  7. 

5  Act  of  May  11,  1880,  21  U.  S.  Stat.  131. 


CARRIERS  AND   CORPORATIONS  51 

"It  is  argued  that  the  power  to  regulate  commerce  among  the 
several  States  is  the  same  as  the  power  to  regulate  commerce  with 
foreign  nations,  and  among  the  Indian  tribes.  But  is  its  scope 
the  same  ?  .  .  .  The  power  to  regulate  commerce  with  foreign 
nations  and  the  power  to  regulate  interstate  commerce,  are  to  be 
taken  diverso  intuitu,  for  the  latter  was  intended  to  secure  equality 
and  freedom  in  commercial  intercourse  as  between  the  States, 
not  to  permit  the  creation  of  impediments  to  such  intercourse, 
while  the  former  clothed  Congress  with  that  power  over  interna- 
tional commerce,  pertaining  to  a  sovereign  nation  in  its  intercourse 
with  foreign  nations,  and  subject,  generally  speaking,  to  no  im- 
plied or  reserved  power  in  the  States.  The  laws  which  would 
be  necessary  and  proper  in  the  one  case  would  not  be  necessary 
or  proper  in  the  other."  This  "does  not  challenge  the  legislative 
power  of  a  sovereign  nation  to  exclude  foreign  persons  or  commod- 
ities, or  place  an  embargo,  perhaps  not  permanent,  upon  foreign 
ships  or  manufactures.  The  same  view  must  be  taken  as  to 
commerce  with  Indian  tribes.  There  is  no  reservation  of  police 
powers  or  any  other  to  a  foreign  nation,  or  to  an  Indian  tribe, 
and  the  scope  of  the  power  is  not  the  same  as  that  over  inter- 
state commerce."  * 

Transportation  from  State  to  State  of  legitimate  ar- 
ticles of  commerce  cannot  be  forbidden.2  Congress  is 
authorized  to  regulate,  not  to  destroy,  commerce  among 
the  States.* 


1  Opinion  of  Mr.  Chief  Justice  Fuller  and  Justices  Shiras,  Brewer,  and 
Peckham  in  Lottery  Case,  188  U.  S.  373,  374 ;  opinion  of  Mr.  Justice  McLean 
in  Groves  v.  Slaughter,  15  Pet.  505;  License  Cases,  5  How.  504,  505; 
United  States  v.  Cisna,  1  McLean  254.  See  House  Report  No.  2491,  59th 
Cong.,  1st  Sess. 

2  Ex  parte  Jackson,  96  U.  S.  727,  735;  In  re  Rapier,  143  U.  S.  no,  133. 
House  Report  2491,  59th  Cong.,  1st  Sess. 

3  Woodruffs.  Mining  Co.,  18  Fed.  753,  778;  Railroad  Commission  Cases, 
116  U.  S.  307,  331.  "The  federal  power  is  a  power  to  interpose,  and  to 
remove  whatever  of  obstructions  or  restrictions  may  have  been  imposed  upon 
commercial  intercourse  with  and  between  the  several  States,  by  local  State 
legislation."  Senator  Foot  of  Vermont,  Jan.  15,  1866,  Cong.  Globe,  39th 
Cong.,  1st  Sess.,  Part  I,  p.  229. 


52  THE   FEDERAL  POWER   OVER 

In  thus  measuring  the  Federal  power,  it  is  immaterial 
whether  commerce  be  conducted  by  natural  individuals 
or  by  corporations.  "This  government  is  neither  a 
party  nor  is  it  a  wisher  in  regard  to  the  results  .  .  .  that 
come  out  of  the  development  of  commerce  or  the  changes 
of  its  methods,  except  that  this  government  deals  with 
this  very  subject  itself  of  commerce,  in  the  interest  of 
commerce."  1 

The  Federal  power,  that  is,  so  far  as  it  exists,  is  not 
personal,  but  is  founded  upon  its  jurisdiction  over  com- 
merce. If  Congress  may  impose  a  given  requirement, 
its  commands  are  obligatory  upon  all,  including  alike 
natural  persons  and  corporations.  If  it  be  without 
power  over  the  commerce  which  it  is  proposed  to  con- 
trol, the  power  cannot  be  acquired  by  asserting  a  wider 
jurisdiction  over  corporations,  for  this  jurisdiction  be- 
longs to  the  States,  not  to  Congress.  Using  the  phrase 
employed  by  Mr.  Justice  Grier  in  another  connection,  it 
may  be  said  that  it  is  not  reasonable  either  that  those 
who  deal  with  corporations  or  the  corporations  them- 
selves should  be  deprived  of  valuable  rights  "by  a 
syllogism  or  rather  by  sophism  which  deals  subtly  with 
words  and  names,  without  regard  to  the  things  or  per- 
sons they  are  used  to  represent."  2 

"At  the  time  of  the  formation  of  the  Constitution  a  large  part 
of  the  commerce  of  the  world  was  carried  on  by  corporations. 
The  East  India  Company,  the  Hudson's  Bay  Company,  the  Ham- 
burgh Company,  the  Levant  Company,  and  the  Virginia  Company 

1  Senator  William  M.  Evarts,  Jan.  13,  1887,  49th  Cong.,  2d  Sess.,  Vol. 
18,  Cong.  Rec,  Part  I,  p.  603. 

2  Marshall  v.  Baltimore  &  Ohio  R.  R.  Co.,  16  How.  314,  327,  328. 


CARRIERS  AND   CORPORATIONS  53 

may  be  named  among  the  many  corporations  then  in  existence 
which  acquired,  from  the  extent  of  their  operations,  celebrity 
throughout  the  commercial  world.  .  .  .  The  language  of  the 
grant  makes  no  reference  to  the  instrumentalities  by  which  com- 
merce may  be  carried  on;  it  is  general,  and  includes  alike  com- 
merce by  individuals,  partnerships,  associations,  and  corpo- 
rations." 

The  Constitution  looked  not  at  form  but  at  substance, 
and  the  substantial  purpose  which  it  was  intended  to 
accomplish  was  that  commerce  among  the  States  should 
be  free,  by  whomsoever  conducted. 

The  purpose  of  constitutional  construction.  It  needs 
no  argument  to  show  that  upon  the  maintenance  of  this 
distinction  between  Federal  powers  over  foreign  and 
over  interstate  commerce,  depends  the  continued  exist- 
ence of  our  constitutional  system  of  government.  If 
Congress  may  treat  separate  States  as  foreign  nations, 
the  powers  which  were  given  to  the  Federal  govern- 
ment for  common  protection  against  external  enemies 
are  sufficient  to  control  the  domestic  policy  of  every 
State. 

In  a  commercial  people  control  of  commerce  is  closely 
associated  with  political  questions,  and  sometimes,  under 
this  pressure,  it  has  been  proposed  to  use  the  ample  Fed- 
eral powers  to  accomplish  results  entirely  beyond  Fed- 
eral jurisdiction,  and  as  to  which  in  the  phrase  employed 
by  Senator  Evarts,  Congress  should  not  be  a  "wisher." 

Such  a  proposition  is  found  in  the  recent  suggestions 
that  Congress  control  the  States  in  the  exercise  of  their 

1  Paul  v.  Virginia,  8  Wall.  168. 


54  THE  FEDERAL  POWER   OVER 

power  of  incorporation  by  excluding  from  interstate 
commerce  all  corporations  except  such  as  should  comply 
with  the  requirements  which  Congress  might  set  up  as 
conditions  for  the  issue  of  a  Federal  license.1 

The  question  is,  therefore,  presented  of  the  purpose  of 
constitutional  interpretation.  The  Supreme  Court  has 
often  held,  in  passing  upon  the  validity  of  State  laws, 
that  the  courts  will  look  into  the  operation  and  effect  of 
a  statute  to  discern  its  purpose,2  and  that  if  laws  pur- 
porting to  be  enacted  in  the  exercise  of  powers  belonging 
to  the  State  have  no  real  or  substantial  relation  to  the 
objects  of  those  powers,  it  is  the  duty  of  the  Court  so  to 
adjudge  and  thereby  give  effect  to  the  Constitution.3 
The  same  rule  which  tests  the  validity  of  State  legis- 
lation determines  also  the  validity  of  legislation  by 
Congress. 

"The  propriety  of  a  law,  in  a  constitutional  light/'  Hamilton 
said,  "must  always  be  determined  by  the  nature  of  the  powers 
upon  which  it  is  founded.  Suppose,  by  some  forced  construction 
of  its  authority,  (which,  indeed  cannot  easily  be  imagined),  the 
Federal  legislature  should  attempt  to  vary  the  law  of  descent  in 
any  State;  would  it  not  be  evident  that,  in  making  such  an  at- 
tempt, it  had  exceeded  its  jurisdiction,  and  infringed  upon  that  of 
the  State?  Suppose,  again,  that  upon  the  pretence  of  an  inter- 
ference with  its  revenues,  it  should  undertake  to  abrogate  a  land 
tax  imposed  by  the  authority  of  a  State ;   would  it  not  be  equally 

1  Report  of  Commissioner  of  Corporations,  December,  1904. 

2  Henderson  v.  Mayor,  etc.,  of  New  York,  92  U.  S.  259,  268;  Railroad 
Co.  v.  Husen,  95  U.  S.  472;  Collins  v.  New  Hampshire,  171  U.  S.  30;  Reid 
v.  Colorado,  187  U.  S.  137;  Compagnie  Francaise  v.  State  Board  of  Health, 
186  U.  S.  380. 

3  Mugler  v.  Kansas,  123  U.  S.  623,  661 ;  Minnesota  v.  Barber,  136  U.  S. 
313;  Hennington  v.  Georgia,  163  U.  S.  299,  303;  Scott  v.  Donald,  165 
U.  S.  58. 


CARRIERS  AND   CORPORATIONS  55 

evident,  that  this  was  an  invasion  of  that  concurrent  jurisdiction 
in  respect  to  this  species  of  tax,  which  the  Constitution  plainly 
supposes  to  exist  in  the  State  governments  ?  "  ■ 

To  these  illustrations  many  others  may  be  added. 
Unless  Federal  powers  are  limited  to  the  effectuation  of 
constitutional  purposes,  the  authority  to  raise  and  sup- 
port armies  may  be  made  a  means  of  controlling  mu- 
nicipal elections,  and  jurisdiction  over  navigable  waters 
may  control  appointment  or  election  to  State  offices,  — 
in  short,  if  Congress  "may  use  a  power  granted  for  one 
purpose  for  the  accomplishment  of  another  and  very 
different  purpose,  it  is  easy  to  show  that  a  constitution 
on  parchment  is  worth  nothing."  2 

There  is  no  constitutional  authority  for  this  method  of 
construction.  "Should  Congress,"  said  Mr.  Chief  Jus- 
tice Marshall,  "under  the  pretext  of  exercising  its  pow- 
ers, pass  laws  for  the  accomplishment  of  objects  not 
intrusted  to  the  government,  it  would  become  the  painful 
duty  of  this  tribunal,  should  a  case  requiring  such  a 
decision  come  before  it,  to  say  that  such  an  act  was  not 
the  law  of  the  land."  3  The  Federal  government  was 
given  the  powers  necessary  or  proper  to  enable  it  to 
accomplish  the  purposes  for  which  it  was  created.  The 
fact  that  a  power  could  be  used  both  for  constitutional 
and  unconstitutional  purposes  was  not  a  reason  for  with- 
holding it  from  the  Federal  government.  "No  power, 
of  any  kind  or  degree,  can  be  given  but  what  may  be 

1  Federalist,  No.  33. 

2  Senator  Hayne,  April  30,  1824.  Annals  18th  Cong.,  1st  Sess.,  Vol.  I, 
p.  648. 

3McCulloch  v.  Maryland,  4  Wheat.  423;  Hoke  v.  Henderson,  4  Dev. 
(N.  C.)  12. 


56  THE   FEDERAL  POWER   OVER 

abused;  we  have,  therefore,  only  to  consider  whether 
any  particular  power  is  absolutely  necessary.  If  it  be, 
the  power  must  be  given,  and  we  must  run  the  risk  of 
the  abuse,  considering  our  risk  of  this  evil  as  one  of  the 
conditions  of  the  imperfect  state  of  human  nature,  where 
there  is  no  good  without  the  mixture  of  some  evil.',  * 

The  framers  of  the  Constitution,  then,  in  every  in- 
stance, granted  powers  " commensurate  to  the  object" 
to  be  attained.2 

That  every  power  given  should,  as  Algernon  Sidney 
said,  be  employed  "wholly  for  the  accomplishment  of 
the  ends  for  which  it  was  given  "  3  is,  therefore,  the  one 
essential  principle  which  applies  to  every  Federal  juris- 
diction. Unless  this  principle  be  accepted  "no  power 
could  be  delegated;  nor  could  government  of  any  sort 
subsist."  4  To  those  opponents  of  the  Constitution  who 
were  not  satisfied  with  this  appeal  to  necessity  and  to  the 
honesty  of  government,  and  who  insisted  that  Congress, 
being  the  judge  of  the  necessity  and  propriety  of  its  acts, 
might  pass  "any  act,  which  it  may  deem  expedient  for 
any  .  .  .  purpose,"  Hanson  replied  "that  every  judge 
in  the  Union,  whether  of  Federal  or  State  appointment 
.  .  .  will  have  a  right  to  reject  any  act,  handed  to 
him  as  a  law,  which  he  may  conceive  repugnant  to  the 
Constitution."  5 

Further  security  against  the  perversion  of  powers  to 

1  Remarks  on  James  Iredell  in  Convention  of  North  Carolina,  4  Elliot 
Deb.  95. 

2  Edmund  Randolph  in  Convention  of  Virginia,  3  Elliot  Deb.  70. 

3  Discourses  on  Government,  Ch.  I,  Sec.  I. 

*  James  Bowdoin,  Convention  of  Massachusetts,  2  Elliot  Deb.  84-85. 
5  A.  C.  Hanson,  "Remarks,"  in  Ford,  (i  Pamphlets  on  the  Constitution," 
217,  234. 


CARRIERS  AND   CORPORATIONS  57 

unintended  purposes  could  not  be  given.  Should  these 
principles  of  constitutional  construction  ever  be  aban- 
doned, should  the  Constitution  be  made  as  broad  as  the 
results  which  Federal  powers  may  accomplish,  and  then 
in  turn  these  powers  be  extended  to  serve  the  needs  of 
the  new  government  thus  created,  it  is  obvious  that  the 
Constitution  has  ceased  to  exist.1 

No  such  methods  of  construction  have  yet  been  sanc- 
tioned. It  is  still  true,  as  Hamilton  said,  that  "the  pro- 
priety of  a  law  in  a  constitutional  sense,  must  always  be 
determined  by  the  nature  of  the  power  upon  which  it  is 
founded." 

It  is  clear,  then,  that  the  Constitutional  Convention 
did  not  intend  to  give  Congress  power  to  tax  or  to  pro- 
hibit commerce  among  the  States,  and  that  the  nature  of 
the  power  upon  which  it  is  sought  to  found  such  a  juris- 
diction fails  to  support  it.  As  Mr.  Chief  Justice  Fuller 
very  forcibly  remarked,  "under  the  Articles  of  Confed- 
eration the  States  might  have  interdicted  interstate  trade, 
yet  when  they  surrendered  the  power  to  deal  with  com- 
merce as  between  themselves  to  the  General  Govern- 
ment, it  was  undoubtedly  in  order  to  form  a  more 
perfect  union  by  freeing  such  commerce  from  State 
discrimination,  and  not  to  transfer  the  power  of  re- 
striction." 2 

1  "Every  implication  of  a  grant"  (of  power  to  Congress)  "is  confined  to 
such  as  are  direct  and  both  necessary  and  proper,  in  the  usual  and  natural 
acceptation  of  the  terms,  else  it  leads  to  unlimited  power.  Every  means 
becomes  in  its  turn  an  end,  and  thus  justifies  the  use  of  means  still  more 
remote,  until  absolute  power  is  attained."  Resolution  of  Legislature  of 
South  Carolina;  adopted  Dec.  18,  1840;  copied  in  Cong.  Globe,  26th 
Cong.,  2d  Sess.,  Vol.  IX,  p.  123,  Jan.  25,  1841. 

2  Lottery  Case,  188  U.  S.  pp.  371-372. 


58  THE  FEDERAL  POWER   OVER 


CHAPTER  III 

GIBBONS     V.    OGDEN 

The  first  decision  of  the  Supreme  Court  upon  the 
commerce  clause  of  the  Constitution,  rendered  over 
eighty  years  ago  in  the  case  of  Gibbons  v.  Ogden,1 
deals  with  a  question  now  commonly  considered  a 
product  of  recent  conditions,  —  the  question  as  to  the 
extent  of  Federal  control  over  interstate  carriers  and 
over  monopolies  of  interstate  commerce. 

The  decision  may,  in  its  effect  upon  the  structure  of 
government,  prove  to  be  the  most  important  of  all  the 
many  cases  which  have  yet  been  decided  by  that  great 
tribunal.  It  has  been  cited  and  approved  many  times; 
whether  cited  or  not,  its  doctrine,  as  that  doctrine  is  now 
understood,  is  the  accepted  basis  of  all  decisions  upon  the 
portion  of  the  Constitution  which  is  developing  more 
rapidly  and  is  the  subject  of  a  larger  number  of  cases 
than  any  other. 

It  would  be  expected  that  a  case  of  controlling  author- 
ity, so  often  considered,  would  long  ago  have  found  its 
place  in  constitutional  history;  but  for  some  reason  not 
readily  apparent,  the  case  has  received  no  adequate 
critical  examination,  although  recent  developments  — 

1  9  Wheat,  i. 


CARRIERS  AND  CORPORATIONS  59 

notably  in  the  Northern  Securities  Case,  and  in  the  sug- 
gestions made  by  the  Commissioner  of  Corporations, 
on  Dec.  21,  1904,  in  his  first  annual  report  —  give 
the  subject  an  increasing  practical  importance.  The 
words  of  the  decision  have  been  literally  applied,  but  no 
effort  appears  to  have  been  made  to  learn  its  significance 
historically. 

Interstate  transportation  by  land  was,  to  a  consider- 
able extent,  originally  instituted,  and  for  many  years 
after  the  adoption  of  the  Constitution  supported,  by  the 
establishment  of  monopolies. 

A  hundred  years  ago  the  commerce  of  the  country  was 
almost  entirely  limited  to  the  foreign  and  coasting  trade. 
The  only  roads  which  existed  led  from  the  woods  to  the 
principal  towns  on  navigable  waters.  There  was  but 
one  connected  route  from  North  to  South  at  the  com- 
mencement of  the  Revolution,1  and  this  was  true  also 
when  the  Constitution  was  framed.2  Even  in  1796  the 
only  roads  with  which  the  States  were  much  concerned 
were  those  which  led  to  navigable  waters;  the  care  of 
"cross-roads,"  as  the  roads  leading  from  State  to  State 
were  called  by  one  who  had  been  a  member  of  the  Con- 
stitutional Convention,  the  States  were  unwilling  to 
assume.3  " Fifty  miles  back  from  the  waters  of  the  At- 
lantic the  country  was  an  unbroken  jungle."  4  In  the 
vigorous  phrase  used  by  Henry  Clay,  "the  country  had 

1  Views  of  President  Monroe  on  Internal  Improvements  enclosed  in 
Message  to  Congress  of  May  4,  1822. 

2  Christopher  Colles,  "Survey  of  the  Roads  of  the  United  States"  (N.  Y., 
1789). 

3  Speech  of  Abraham  Baldwin,  Feb.  11,  1796.  Annals  4th  Cong.,  1st 
Sess.,  314. 

4  McMaster,  "Hist.  Am.  People,"  Vol.  I,  p.  4. 


60  THE   FEDERAL  POWER   OVER 

scarcely  any  interior."  1  Turnpike  roads  did  not  come 
into  general  use  until  the  nineteenth  century.2  Mean- 
while, as  the  population  increased  and  pushed  further 
inland,  a  demand  grew  up  for  better  means  of  land  com- 
munication. Shays' s  Rebellion  and  the  Whiskey  Rebel- 
lion showed  the  political  necessity,  and  commercial  and 
social  needs  were  even  greater.  Under  these  conditions 
there  was  but  one  way  in  which  communication  could 
be  introduced.  The  States  could  not  establish  and 
operate  lines  of  coaches,  build  bridges,  and  maintain 
ferries.  Taxation  for  these  purposes  would  not  have 
been  borne.  Transportation  must  pay  for  itself,  and 
this  could  be  accomplished  only  by  the  creation  of 
monopolies.  If  persons  could  be  found,  willing  to 
establish  a  service  where  there  were  no  improved  roads 
and  little  or  no  travel,  it  was  considered  good  public 
policy  to  encourage  the  establishment  of  the  service 
by  giving  exclusive  rights.  Monopolies  were,  therefore, 
granted  in  every  direction  and  by  every  State.  The 
Latin  phrase,  periculum  privatum ,  utilitas  publica, 
which  appeared  on  the  seal  of  the  first  railroad  company 
incorporated  in  England,  seems  to  have  expressed  the 
views  not  only  of  those  who  engaged  in  that  particular 
enterprise,  but  also  the  public  opinion  of  America,  as 
well  as  of  England,  in  regard  to  ventures  in  the  way 
of  providing  transportation  generally. 

The  leader  of  this  movement  in  the  Middle  and  East- 
ern States  was  one  Levi  Pease,  of  Shrewsbury,  Mas- 

1  Speech  in  House  of  Representatives,  Jan.  30,  1824.     Annals  18th  Cong., 
1st  Sess.,  Vol.  I,  1315. 

2  Report  of  Committee  to  House  of  Representatives,  February,  181 7.   An- 
nals 14th  Cong.  2d  Sess.,  929;  Hadley,  "Railroad  Transportation,"  p.  26. 


CARRIERS  AND   CORPORATIONS  61 

sachusetts,  a  famous  man  in  his  day,  but  now  as  little 
known  as  are  the  annals  of  stage-coach  travel.  He  was 
the  sole  projector  of  the  mail  stage  establishment  of  the 
Federal  government,  and  was  long  engaged  in  super- 
intending the  various  branches  of  the  system.  It  is  not 
easy  at  this  time  to  learn  how  far  his  control  extended, 
but  perhaps  there  has  been  no  time  when  the  transpor- 
tation interests  of  a  large  section  of  the  country  seemed 
so  to  be  within  the  hands  of  a  single  individual,  as  when, 
in  the  early  days  of  the  nineteenth  century,  these  inter- 
ests of  the  Eastern  States  were  in  his  management. 
Notwithstanding  this  fact  there  was  no  public  opposition 
to  his  control,  and  when  he  died  it  was  said  that  "he 
was  rich  in  the  affection  of  all  who  knew  him."  * 

Plainly,  the  public,  and  apparently  the  courts,  were 
then  far  from  considering  individual  control  of  inter- 
state transportation  to  be  a  ground  for  governmental  or 
judicial  interference. 

The  policy  which  thus  built  up  "the  immense  mail 
stage  establishments,"  as  they  were  then  considered,2 
was  not  accidental,  nor  was  it  a  temporary  expedient. 
Canals  and  railways  were  built  and  maintained  in  the 
same  way,  and  the  policy  which  began  in  the  East  ex- 
tended throughout  the  country  and  continued  unques- 
tioned until  after  the  Civil  War,  —  in  some  respects  still 
continues. 

1  Cleveland  Herald,  Feb.  27,  1824.  Article  on  Levi  Pease,  New  Eng- 
land Genealogical  and  Historical  Register,  Vol.  2,  p.  313.  Mss.  entitled 
"A  Traveller's  Journal,  Observations,  and  Reflections  in  the  Western,  Mid- 
dle and  Eastern  States  of  North  America,  a.d.  1823-4,"  published  in  the 
National  Crisis  and  copied  in  the  Western  Reserve  Chronicle  of  Warren, 
Trumbull  Countv,   Ohio,  Feb.  2,   1824. 

2  Cleveland  Herald,  Feb.  27,  1824. 


62  THE   FEDERAL  POWER   OVER 

An  idea  of  the  extent  to  which  monopolies  were 
granted  may  be  gained  from  an  examination  of  early 
statutes. 

In  New  York  a  monopoly  of  stage  transportation  on 
the  east  bank  of  the  Hudson  was  in  1785  given  to  an 
individual.1  Transportation  in  the  Mohawk  Valley 
seems  to  have  taken  care  of  itself,  but  in  1804  the  need 
for  better  facilities  west  of  Utica  is  shown  by  the  grant 
of  a  monopoly  of  stage  transportation  from  Utica  to 
Canandaigua,2  and  in  1807  a  monopoly  was  granted 
from  Canandaigua  to  Buffalo.3  Thus,  except  the  dis- 
tance from  Albany  to  Utica,  the  whole  path  now  fol- 
lowed by  the  New  York  Central  Railroad  from  one  end 
of  the  State  to  the  other,  was  given  by  law  to  private 
monopoly.  That  these  monopolies  did  not  expressly 
operate  beyond  the  State  line  is  of  small  moment. 
They  extended  to  the  State  line,  and  restricted  inter- 
state transportation  to  the  channels  which  the  State 
established  for  its  passage. 

This  is  true  also  of  the  monopoly  which  the  State 
granted  in  1798  for  transportation  between  Lansing- 
burgh  and  Hampton  in  Washington  County,  near  the 
Vermont  line,  west  of  Rutland;4  of  the  monopoly 
granted  in  1803  for  transportation  between  Albany  and 
a  point  on  the  New  Jersey  line;5  of  the  monopoly  of 
181 1  between  Schaghticoke  and  the  Vermont  line,  in 
Washington  County ; 6    and  of  the  monopoly  between 

1  Laws  of  1 785-1 788,  Ch.  52,  p.  99,  Act  of  April  4,  1785. 

2  Laws  of  1805,  Ch.  69,  p.  137,  Act  of  April  2. 

3  Act  of  April  6,  1807,  Ch.  144,  p.  186. 

4  Act  of  March  30,  1798,  Ch.  62,  p.  224. 

5  Act  of  Feb.  26,  1803,  Ch.  20,  p.  322. 

6  Act  of  April  4,  181 1,  Ch.  151,  p.  226. 


CARRIERS  AND   CORPORATIONS  63 

Champlain,  in  Clinton  County,  and  the  Canada  line.1 
The  monopoly  of  transportation  between  Catskill 
Landing  and  Unadilla,  which  was  granted  in  1805  2 
and  renewed  in  181 2,3  did  not  extend  to  the  State  line, 
and  may  in  fact  have  had  little  to  do  with  interstate 
transportation;  but,  as  a  matter  of  law,  interstate 
traffic  passing  between  these  points,  if  any  such  existed, 
was  as  effectually  restricted  as  was  the  purely  domestic 
traffic. 

In  some  instances  the  grant  of  exclusive  privileges  was 
expressly  made  effective  beyond  the  State  line. 

On  March  30,  1797,  the  State  of  New  York  granted 
to  an  individual  the  exclusive  right  to  operate  between 
Goshen,  Orange  County,  and  New  York  City.  The 
natural  course  of  this  coach  would  be  through  the 
Ramapo  Valley,  past  Tuxedo,  and  through  a  portion  of 
New  Jersey.  The  statute  does  not  specify  the  route  to 
be  followed,  but  it  excludes  all  competition  between  the 
two  points  named,  and,  therefore,  covers  all  routes.4 
The  same  may  be  said  of  the  monopoly  granted  in  181 7 
of  transportation  between  Newburgh,  Monticello,  and 
other  places,  "on  the  mail  route,  so  far  as  the  same  lies 
within  this  State "  5  —  apparently  a  rather  circuitous 
route.  What  had  been  done  in  New  York  was  also 
done  in  other  States.  Transportation  between  New  York 
and  New  England  was  monopolized  in  Connecticut  by 
that  State.6    The  mail  route  through  Vermont,  between 

1  Act  of  April  5,  1817,  Ch.  183.  p.  181. 

2  Act  of  March  28,  1805,  Ch.  49,  p.  70. 

3  Act  of  June  8,  1812,  Ch.  108,  p.  183. 

4  Laws  of  1797-1800,  Ch.  70,  p.  97. 

5  Act  of  Feb.  14,  1817,  Ch.  35,  p.  24. 

6  Perrin  v.  Sikes  (Conn.,  1802),  1  Day  19. 


64  THE   FEDERAL  POWER   OVER 

Springfield,  Massachusetts,  and  Dartmouth  College, 
New  Hampshire,  was  given  by  Vermont  as  a  monopoly 
to  Levi  Pease.1  In  the  same  manner  the  North  and 
South  lines  of  communication  in  the  South  were  monop- 
olized by  Maryland  2  and  Virginia.3  South  Carolina 
in  1796  established  a  monopoly  of  stage  transportation 
between  Georgetown  and  Charleston,  and  Charleston 
and  Savannah,  Georgia,  reserving,  however,  a  right  to 
the  Federal  government  to  run  stages  between  the 
places  named.4 

In  the  matter  of  exclusive  grants  of  ferries  and  bridges 
the  States  were  especially  liberal. 

Before  the  decision  of  Gibbons  v.  Ogden  and  after  the 
adoption  of  the  Constitution,  the  State  of  Vermont 
granted  no  less  than  twenty-eight  exclusive  rights  of 
ferriage  over  Lake  Champlain  to  the  New  York  shore, 
besides  twenty-seven  grants  of  exclusive  rights  of 
ferriage  over  waters  of  Lake  Champlain  within  the 
limits  of  the  State.  Within  the  same  period  New  York 
granted  fourteen  monopolies  of  ferriage  over  Lake 
Champlain  to  the  Vermont  shore,  besides  granting  two 
monopolies  of  ferriage  across  the  St.  Lawrence  River 
to  the  Canada  shore,  and  one  across  the  Delaware 
River  to  the  Pennsylvania  shore. 

This  practice  still  continues  with  the  express  approval 
of  the  Supreme  Court  and  the  courts  of  many  States.5 

1  Act  of  Oct.  31,  1792.  2  Act  of  Dec.  21,  1790. 

3  Act  of  Dec.  4,  1787,  Ch.  79,  p.  618;  Act  of  Oct.  31,  1792,  Ch.  98, 
p.  622 ;  Act  of  Dec.  21,  1790,  Ch.  62,  p.  194. 

4  Act  of  Dec.  19,  1796,  Vol.  V,  Stats.  S.  C,  p.  281;  see  also  —  Act  of 
Dec.  17,  1808,  Vol.  V,  Stats.  S.  C,  p.  580;  Act  of  Dec.  16,  1815,  Vol.  IX, 
Stats.  S.  C,  p.  482. 

5  Prentice  and  Egan,  Commerce  Clause,  p.  157. 


CARRIERS  AND   CORPORATIONS  65 

Many  other  statutes  of  this  character  may  be  cited,  all 
at  the  time  of  undoubted  validity. 

The  question  of  the  constitutionality  of  such  laws  was 
brought  before  Congress  in  1792  upon  a  motion  to  allow 
the  proprietors  of  stages  employed  in  carrying  the  mails 
to  carry  passengers  also.  This,  it  was  answered,  was 
not  within  the  power  of  Congress.  "The  question," 
said  Mr.  Niles,  "is  simply,  whether  Congress  have  a 
right  to  authorize  the  carrier  of  the  mail  to  carry  pas- 
sengers, on  hire  through  those  States  where  an  exclusive 
right  of  carrying  passengers,  has  been  granted  by  the 
State  government  and  still  exists.  You  are  empowered 
by  the  Constitution  to  establish  post-offices  and  post- 
roads,  and  to  do  whatever  may  be  necessary  and  proper 
to  carry  that  power  into  effect.  Now,  sir,  is  it  necessary, 
in  order  to  the  transportation  of  your  mail,  that  you 
should  erect  stage-coaches  for  the  purpose  of  transport- 
ing passengers?  What  has  your  mail  to  do  with  pas- 
sengers transported  for  hire  ?  Why,  sir,  nothing  more 
than  this  —  by  granting  to  the  carrier  of  your  mail  a 
right  to  carry  passengers  for  hire,  the  carriage  of  the 
mail  may  be  a  little  less  expensive.  Does  this  consid- 
eration render  it  necessary  and  proper  for  you  to  violate 
the  laws  of  the  States?"1 

The  motion  was  lost.  No  suggestion  was  made  that 
the  State  laws  in  any  way  concerned  the  Federal  power 
over  commerce,  or  that  their  validity  was  open  to  ques- 
tion on  this  ground. 

Even  in  relation  to  foreign  commerce  the  Federal 
power  did  not  go  unchallenged,  for  during  the  period  in 

1  Annals  2d  Congress  (1792),  pp.  303-309. 


66  THE   FEDERAL  POWER   OVER 

which  Congress  was  prevented  from  prohibiting  the 
slave  trade  many  States  prohibited  the  importation  of 
slaves,1  —  a  course  of  action  in  which  the  Federal  gov- 
ernment apparently  acquiesced.  The  House  of  Repre- 
sentatives, at  least,  then  claimed  nothing  more  than  that 
it  could  regulate  the  treatment  of  slaves  by  citizens  of 
the  United  States  during  their  transportation  into  the 
States  admitting  them.2  It  is  true  that  "the  migration 
or  importation  of  such  persons  as  any  of  the  States  now 
existing  may  think  proper  to  admit "  is  the  subject  of 
a  separate  provision  of  the  Constitution,  but  the  very 
form  of  this  provision  implies  that  until  legislation  by 
Congress  the  States  were  free  to  act.  This  was  the 
general  view.3  It  was  said  in  Congress  without  contra- 
diction that  "the  State  governments  have  always  pos- 
sessed the  power  of  stopping  or  taxing  passengers ;  that 
power  they  have  never  given  up,"  4  and  even  a  broader 
power  was  exercised,  for  after  the  adoption  of  the  Con- 
stitution acts  of  banishment  appear  to  have  existed  and 
were  repealed  some  time  later.5 

1  Sehouler's  "  History  of  the  United  States,"  Vol.  I,  p.  144. 

2  Annals  of  Congress,  Feb.  n,  March  23,  1790;  Act  of  Feb.  28,  1803; 
2  Stat.  205;  Annals  7th  Cong.,  2d  Sess.,  1563.  Brig  Wilson  v.  United 
States,  1  Brock.,  423. 

3  Groves  v.  Slaughter,  15  Pet.  449;  Maryland,  Act  of  Jan.  4,  1812,  Ch. 
179,  p.  176,  Laws  of  1811-1812;  Act  of  Jan.  8,  1816,  Ch.  56;  Laws  of  1816- 
1817;  South  Carolina,  Act  of  Dec.  19,  1796. 

4  Annals  2d  Congress  (1792),  303,  309. 

5  New  York,  Act  of  April  3,  1790,  Ch.  46,  p.  175 ;  Georgia,  Act  of  Feb.  7, 
1799.  Transportation  out  of  the  State  as  a  punishment  for  crime  was  for- 
bidden by  Illinois  Constitution  of  1818,  Art.  VIII,  Sec.  17;  Arkansas  Consti- 
tution of  1836,  Art.  I,  Sec.  10;  Ohio  Constitution  of  1802,  Art.  VIII,  Sec.  17; 
Vermont  Constitution  of  1793,  Chap.  I,  XXI.  Mississippi  forbade  the  exile 
of  any  free  white  citizen  of  the  State,  Constitution  of  1832,  Art.  I,  Sec. 
27.  Transportation  from  the  United  States  was,  in  Virginia,  long  a  recog- 
nized punishment  for  slaves.  Code  i860,  Ch.  17,  Sec.  19,  Ch.  200.  In 
many  instances  State  Constitutions  guaranteed  the  right  of  emigration. 
Indiana  Constitution  of  1816,  Art.  I,  Sec.  23;   1851,  Art.  I,  Sec.  36;  Kansas 


CARRIERS  AND   CORPORATIONS  67 

Gibbons  v.  Ogden  held  that  a  monopoly  granted 
by  the  State  of  New  York  of  the  navigation  of  its 
waters  could  not  exclude  competition  in  the  busi- 
ness of  transporting  passengers  and  freight  through 
the  Kill-von-Kull  and  over  the  Hudson  River  be- 
tween Elizabethtown,  New  Jersey,  and  the  City  of 
New  York. 

In  view  of  the  practice  which  had  continued  unques- 
tioned for  thirty-five  years,  the  decision  seems,  upon  first 
reading,  a  revolutionary  usurpation  of  power  by  the 
Supreme  Court.  If  a  State  may  grant  monopolies  of 
ferriage,  why  not  also  of  other  navigation  ?  It  is  not  the 
distance  travelled  after  crossing  the  line  which  raises  the 
question  of  Federal  power,  butjhe  fact  of  the  crossing.1 
If  the  right  of  transportation  across  Lake  Champlain 
can  be  granted  as  a  monopoly,  why  not  also  the  right 
of  transportation  across  the  Hudson  ?  If  a  State  may 
grant  monopolies  of  transportation  by  land,  why  not  by 
water  ? 

How  then  was  the  decision  in  Gibbons  v.  Ogden  re- 
ceived at  the  time?  To  what  extent  was  it  applied? 
Was  it  considered  to  cast  doubt  upon  the  validity  of 
long-continued  practice  ? 

A  very  brief  examination  of  current  writings  shows 
that,  so  far  from  being  revolutionary,  the  doctrine  of 


Constitution  of  1857,  Art.  XV,  Sec.  22;  Kentucky  Constitution  of  1792, 
Art.  XII;  1799,  Art.  X,  Sec.  27;  1850,  Art.  XIII,  Sec.  29;  Missouri  Con- 
stitution of  1820,  Art.  XIII,  Sec.  21;  Oregon  Constitution  of  1857,  Art.  I, 
Sec.  31;  Pennsylvania  Constitution  of  1776,  XV;  1790,  Art.  IX,  Sec.  25; 
1838,  Art.  IX,  Sec.  25;  1873,  Art.  I,  Sec.  25;  Vermont  Constitution  of  1777, 
Ch.  I,  XVII;    1786,  Ch.  I,  XXI;    1793,  Ch.  I,  XIX. 

1  Covington  Bridge  Co.  v.  Kentucky,  154  U.  S.  204;  Gloucester  Ferry 
Co.  v.  Pennsylvania,  114  U.  S.  196. 


68  THE   FEDERAL  POWER   OVER 

the  Court  was  in  accord  with  the  best  public  opinion  of 
the  time.1 

The  case  was  argued  on  Wednesday,  Thursday, 
Friday,  and  Saturday,  Feb.  4,  5,  6,  and  7,  1824. 
The  decision  was  announced  on  Tuesday,  March  2, 
1824.  On  Friday,  March  5,  the  New  York  Evening 
Post  reported  the  fact,  saying:  — 

"This  opinion,  drawn  up  by  Justice  Marshall,  presents  one  of 
the  most  powerful  efforts  of  the  human  mind  that  has  ever  been 
displayed  from  the  bench  of  any  court.  Many  passages  indicated 
a  profoundness  and  forecast,  in  relation  to  the  destinies  of  our 
Confederacy,  peculiar  to  the  great  man  who  acted  as  the  organ 
of  the  court.     The  Steamboat  Grant  is  at  an  end." 2 

The  opinion  was  published  by  the  Evening  Post  on 
Monday,  March  8,  with  the  remark:  "We  presume 
it  will  command  the  assent  of  every  impartial  mind 
competent  to  embrace  such  a  subject. "  On  March  27, 
the  Louisville  Public  Advertiser  expressed  the  same 
view:  "We  not  only  believe  the  opinion  of  the  court  to 
be  correct;  but  we  feel  confident  that,  had  the  same  case 
been  tried  by  any  competent  tribunal,  not  within  the 
State  of  New  York,  the  result  would  have  been  the 
same." 

There  was  nothing  new  in  the  establishment  of  the 
rule  which  to  most  modern  readers  seems  the  great 
achievement  of  the  case,  that  Federal  power  over  com- 

1  Veto  message  of  Gov.  Oliver  Wolcott  of  Connecticut,  May  Session, 
1822,  reported  in  Columbian  Register  (New  Haven),  June  i,  1822.  See 
also  New  York  National  Union,  March  13,  1824;  Connecticut  Courant, 
March  9,  1824;  Columbian  Register,  April  3,  1824;  New  York  A merican, 
March  5,  1824;  Delaware  Gazette  (Wilmington),  March  19,  1824. 

2  To  same  effect,  Albany  Argus,  March  9,  1824. 


CARRIERS  AND  CORPORATIONS  69 

merce  is  exclusive.  To  the  extent  then  under  consid- 
eration, it  had  always  been  so  regarded.1  State  naviga- 
tion laws  were  not  repealed  by  the  States  which  had 
enacted  them,  but  were  treated  as  ineffective,  —  uncon- 
stitutional. In  one  instance,  indeed,  an  agreement  made 
by  two  States,  for  free  passage  of  goods  from  one  to  the 
other  by  water  was,  in  the  absence  of  any  legislation 
by  Congress,  repealed  by  one  of  the  States,  apparently 
upon  the  ground  that  under  the  Constitution  this 
result  was  accomplished  without  legislation.2  It  is 
true  that  the  States  continued  to  enforce  their  own 
pilotage  and  quarantine  laws,  but  this  was  expressly 
permitted  by  Federal  statutes.  Daniel  Sheffey,  of 
Virginia,  in  his  argument  in  the  House  of  Representa- 
tives in  February,  181 7,3  assumed  that  the  Federal 
power  over  commerce  was  exclusive,  and  even  Philip  P. 
Barbour,  then  a  member  from  the  same  State,  although 
he  disagreed  with  Sheffey' s  conclusions,  raised  no 
question  of  the  correctness  of  this  assumption.  Will- 
iam Crawford  of  Pennsylvania  said  in  181 1  that 
"The  sole  power  given  to  the  United  States,  to  .  .  . 
regulate  commerce,  or  make  war,  has  never  been  ques- 
tioned.,,  4 

That  the  Federal  power  was  exclusive  seems,  how- 
ever, as  the  subject  was  then  regarded,  to  have  had 
little  relation  to  monopolies  of  transportation,  and  no 
relation  whatever  to  land  transportation  and  ferriage. 
The  New  York  Steamboat  grant  and  the  case  of  Gib- 

1  Elliot  Deb.  Vol.  IV,  p.  20. 

2  Act  of  North  Carolina,  Nov.  25,  1790,  Laws  of  1715-1795,  Ch.  377. 

3  Annals  14th  Cong.,  2d  Sess.,  pi.  888. 

4  Speech  in  House,  Jan.  23,  181 1.     Annals  nth  Cong.,  3d  Sess.,  753. 


70 


THE   FEDERAL  POWER   OVER 


bons  v.  Ogden  were  the  subjects  of  widespread  public 
interest  and  of  many  leading  articles  and  letters,  but  in 
the  whole  discussion  no  reference  was  made  to  an  effect 
upon  other  monopolies  than  the  one  involved  in  this 
case.  Had  it  been  thought  possible  that  the  decision 
might  affect  monopolies  of  land  transportation  and 
ferriage,  some,  of  all  those  then  writing  on  the  subject, 
must  have  referred  to  a  result  which,  if  a  possible 
consequence,  was  an  obvious  one. 

To  learn  the  meaning  of  the  decision  we  are  thrown 
back  upon  the  case  itself  in  connection  with  the  facts  of 
contemporary  history. 

Gibbons  v.  Ogden  involved  the  validity  of  a  law  of  the 
State  of  New  York,  giving  to  Livingston,  Fulton,  and 
their  assigns  the  exclusive  right  for  a  term  of  years  to 
navigate  the  waters  of  that  State  by  steamboats.  This 
exclusive  right,  over  part  of  these  waters,  had  been 
assigned  to  Ogden.  Gibbons  was  the  owner  of  a  vessel 
of  more  than  twenty  tons  burden,  enrolled  and  licensed 
under  Federal  law,  for  carrying  on  the  coasting  trade, 
between  Elizabethtown  in  New  Jersey  and  the  City  of 
New  York,  the  part  of  the  voyage  within  the  State  of 
New  York  being  over  waters  covered,  if  the  State  law 
were  valid,  by  Ogden' s  monopoly. 

To  protect  this  monopoly  Ogden  filed  his  bill  against 
Gibbons  in  the  New  York  State  court,  praying  for  an 
injunction  to  forbid  the  operation  of  the  defendant's 
vessel  within  the  closed  waters  of  the  State.  This 
injunction  being  granted,  and  the  decree  affirmed  by 
the  highest  court  of  the  State,  the  case  was  brought  before 
the  Supreme  Court  of  the  United  States  for  review. 


CARRIERS  AND   CORPORATIONS  71 

The  issues  presented  were  recognized  at  the  time  as 
momentous.  Over  them,  the  States  of  New  York,  New 
Jersey,  and  Connecticut  were,  said  Attorney- General 
Wirt,  "  almost  on  the  eve  of  war."  Unless  the  dispute 
can  be  settled,  he  said,  "you  will  have  civil  war."  * 

For  the  plaintiff  in  error,  who  had  been  defendant  be- 
low, but  one  defence  was  presented  in  the  pleadings. 
He  relied  on  licenses  granted  under  the  Act  of  Congress 
of  Feb.  18,  1793,  for  enrolling  and  licensing  ships 
and  vessels  to  be  employed  in  the  coasting  trade.  This 
was  his  sole  defence,  although  in  argument  it  was  also 
urged  that  the  Federal  power  over  commerce  was  ex- 
clusive of  all  State  jurisdiction. 

For  defendant  in  error  it  was  contended  that  the  Fed- 
eral statute  did  not  grant  authority  to  engage  in  the 
coasting  trade,  but  like  other  licensing  acts  merely  im- 
posed restrictions  upon  the  conduct  of  the  trade,  and 
furthermore  that  State  and  Federal  powers  over  the 
subject  were  concurrent. 

1  9  Wheat.  1,  184-192.  The  newspapers  of  the  time  show  much  irrita- 
tion in  all  these  States,  but  there  is  little  to  indicate  the  existence  of  such  seri- 
ous apprehensions  as  those  stated  by  the  Attorney-General.  Still  the  situation 
was  undoubtedly  difficult,  and  some  radical  counsels  may  be  found. 

"We  can  hardly  believe  it  possible,  that  small  as  the  State  of  New  Jer- 
sey is,  it  will  suffer  itself  to  be  degraded,  and  its  rights  to  be  trampled  upon, 
without  a  struggle,  at  least,  to  maintain  them.  We  hope  and  trust  that  the 
act  laying  a  tax  on  steamboat  passengers,  passed  the  last  winter,  will  be 
promptly  and  rigidly  enforced,  and  that  the  legislature  of  New  Jersey  will, 
at  their  next  session,  adopt  such  other  decisive  measures  as  the  interest, 
honour,  and  dignity  of  the  State  require."  Trenton,  True  American,  Jan. 
24,  1820.  See  also,  New  Brunswick  Fredonian,  April  11,  1822.  Irritation 
over  the  New  York  monopoly  seems  to  have  been  strong  also  in  Ohio  and  in 
Vermont,  for  Ohio  imposed  upon  all  vessels  which,  claiming  the  right  to 
navigatethe  waters  of  New  York  under  the  laws  of  that  State,  landed  pas- 
sengers in  Ohio,  a  fine  of  $100  for  each  passenger  so  landed,  —  Repub- 
lican Advocate  (New  London,  Conn.),  May  1,  1822,  while  Vermont  granted 
to  an  individual  a  monopoly  within  its  limits  of  the  right  to  navigate  the 
waters  of  Lake  Champlain,  —  Act  of  Nov.  10,  1815,  Ch.  102,  p.  120. 


72 


THE   FEDERAL  POWER   OVER 


In  considering  these  propositions  it  is  important  to 
observe  closely  the  position  taken  by  counsel  for  the 
appellant.     Mr.  Webster  contended:  — 

"That  the  power  of  Congress  to  regulate  commerce,  was  com- 
plete and  entire,  and,  to  a  certain  extent,  necessarily  exclusive; 
that  the  acts  in  question  were  regulations  of  commerce,  in  a  most 
important  particular;  and  affecting  it  in  those  respects,  in  which 
it  was  under  the  exclusive  authority  of  Congress.  He  stated  this 
first  proposition  guardedly.  He  did  not  mean  to  say  that  all 
regulations  which  might,  in  their  operation,  affect  commerce,  were 
exclusively  in  the  power  of  Congress ;  but  that  such  power  as  had 
been  exercised  in  this  case,  did  not  remain  with  the  States.  Noth- 
ing was  more  complex  than  commerce ;  and  in  such  an  age  as  this, 
no  words  embrace  a  wider  field  than  commercial  regulation.  Al- 
most all  the  business  and  intercourse  of  life  may  be  connected,  in- 
cidentally, more  or  less,  with  commercial  regulation.  But  it  was 
only  necessary  to  apply  to  this  part  of  the  Constitution  the  well 
settled  rules  of  construction. 

"Some  powers  are  holden  to  be  exclusive  in  Congress,  from 
the  use  of  exclusive  words  in  the  grant;  others,  from  the  prohibi- 
tions on  the  States  to  exercise  similar  powers;  and  others,  again, 
from  the  nature  of  the  powers  themselves.  It  has  been  by  this 
mode  of  reasoning  that  the  Court  has  adjudicated  on  many  im- 
portant questions;  and  the  same  mode  is  proper  here.  And, 
as  some  powers  have  been  holden  exclusive,  and  others  not 
so,  under  the  same  form  of  expression,  from  the  nature  of  the 
different  powers  respectively;  so,  where  the  power,  on  anyone 
subject,  is  given  in  general  words,  like  the  power  to  regulate 
commerce,  the  true  method  of  construction  would  be,  to  consider 
of  what  parts  the  grant  is  composed,  and  which  of  those,  from 
the  nature  of  the  thing,  ought  to  be  considered  exclusive.  The 
right  set  up  in  this  case,  under  the  laws  of  New  York,  is  a 
monopoly.  Now,  he  thought  it  very  reasonable  to  say,  that  the 
Constitution  never  intended  to  leave  with  the  States  the  power 
of  granting  monopolies,  either  of   trade  or  of  navigation ;   and, 


CARRIERS  AND   CORPORATIONS  73 

therefore,  that  as  to  this,  the  commercial  power  was  exclusive 
in  Congress."  ' 

It  would  be  difficult  to  find  more  convincing  evidence 
of  Webster's  genius  than  the  fact  that  in  the  first  argu- 
ment upon  the  commerce  clause  in  the  Supreme  Court, 
he  suggested  the  distinction  which  is  now  embedded  in 
the  Constitution  itself.  To  students  who  have  known  no 
other  construction,  the  distinction  seems  inevitable,  but 
it  was  not  so  at  the  time. 

Even  the  Chief  Justice  in  his  decision  of  the  case  gave 
Webster's  distinction  no  support.  The  doctrine  of  the 
Court,  if  accepted  literally,  is  surprising  in  the  extent  of 
the  power  claimed  for  the  Federal  government.  Com- 
merce was  defined  as  a  term  of  the  largest  import,  in- 
cluding intercourse  for  the  purpose  of  trade  in  any  and 
all  its  forms.  Throughout  this  wide  field  there  was  to 
be  but  one  sovereign.  The  power  of  commercial  regu- 
lation, it  was  held,  is  a  whole,  incapable  of  division,  and, 
therefore,  exclusive  of  a  like  power  in  a  co-ordinate 
sovereignty.  "The  power  to  tax,"  Mr.  Chief  Justice 
Marshall  said,  "is  an  instance  of  a  power  which  is  in 
its  nature  divisible." 

"Taxation  is  the  simple  operation  of  taking  small  portions 
from  a  perpetually  accumulating  mass,  susceptible  of  almost 
infinite  division ;  and  a  power  in  one  to  take  what  is  necessary  for 
certain  purposes,  is  not,  in  its  nature,  incompatible  with  a  power 
in  another  to  take  what  is  necessary  for  other  purposes.  .  .  . 
When,  then,  each  government  exercises  the  power  of  taxation, 
neither  is  exercising  the  power  of  the  other.  But,  when  a  State 
proceeds  to  regulate  commerce  with  foreign  nations,  or  among  the 

1g  Wheat.  9-10. 


74  THE   FEDERAL  POWER   OVER 

several  States,  it  is  exercising  the  very  power  that  is  granted  to 
Congress,  and  is  doing  the  very  thing  which  Congress  is  authorized 
to  do.  There  is  no  analogy,  then,  between  the  power  of  taxation 
and  the  power  of  regulating  commerce.  ...  It  has  been  con- 
tended by  the  counsel  for  the  appellant,  that  as  the  word  to  '  regu- 
late '  implies  in  its  nature,  full  power  over  the  thing  to  be  regu- 
lated, it  excludes,  necessarily,  the  action  of  all  others  that  would 
perform  the  same  operation  on  the  same  thing.  That  regulation 
is  designed  for  the  entire  result,  applying  to  those  parts  which 
remain  as  they  were  as  well  as  to  those  which  are  altered.  It 
produces  a  uniform  whole,  which  is  as  much  disturbed  and  de- 
ranged by  changing  what  the  regulating  power  designs  to  leave 
untouched,  as  that  on  which  it  has  operated.  There  is  great  force 
in  this  argument,  and  the  court  is  not  satisfied  that  it  has  been  re- 
futed." J 

In  this  opinion,  Mr.  Justice  Johnson  agreed,  holding 

"The  power  of  a  sovereign  State  over  commerce,  therefore, 
amounts  to  nothing  more  than  a  power  to  limit  and  restrain  it  at 
pleasure.  And  since  the  power  to  prescribe  the  limits  to  its  free- 
dom necessarily  implies  the  power  to  determine  what  shall  remain 
unrestrained,  it  follows,  that  the  power  must  be  exclusive;  it 
can  reside  but  in  one  potentate ;  and  hence,  the  grant  of  this  power 
carries  with  it  the  whole  subject,  leaving  nothing  for  the  State  to 
act  upon."2 

On  these  grounds  the  Court  announced  the  broad  rule 
that  the  power  of  commercial  regulation  is  an  indivisible 
unit;  that  it  is  exclusively  vested  in  Congress,  and  that 
no  part  of  it  can  be  exercised  by  a  State. 

At  this  point  the  limitation  upon  Webster's  conclusion 
and  upon  the  doctrine  of  the  Court  becomes  conspicuous. 

The    framers    of    the    Constitution,    Webster    says, 

1  9  Wheat,  pp.  199,  209.  2  p.  227. 


CARRIERS  AND  CORPORATIONS  75 

"never  intended  to  leave  with  the  States  the  power  of 
granting  monopolies,  either  of  trade  or  of  navigation." 
Why  this  restriction  of  Federal  power  to  navigation? 
Is  not  all  interstate  transportation  within  Federal  con- 
trol, and  is  not  navigation  within  the  control  merely 
as  one  of  many  methods  of  transportation  ? 

This  doctrine  —  now,  in  some  aspects,  the  common- 
place of  constitutional  law  —  was  wholly  impossible  in 
1824.  To  have  held  that  all  monopolies  granted  by  the 
States  were  illegal,  would  have  overturned  established 
customs  and  rights  of  property  until  then  unquestioned. 
No  such  effect  was  intended  and  no  new  doctrine  was  ad- 
vanced. The  Chief  Justice  spoke  of  his  opinion  as  hav- 
ing "the  tediousness  inseparable  from  the  endeavor  to 
prove  that  which  is  already  clear.,,  1  Mr.  Justice  John- 
son said  that  the  doctrine  of  the  case  had  long  been  ap- 
proved by  "contemporaneous  and  continued  assent."  2 
As  stated  by  the  Court,  the  decision,  in  this  respect, 
followed  Webster's  argument,  and,  without  reference  to 
transportation,  held  that  the  Federal  power  over  com- 
merce included  control  of  navigation.3  To  this  point 
the  decree  is  expressly  limited.4  No  reference  was  there 
made  to  an  exclusive  Federal  power  to  regulate  inter- 
course. The  recitals  of  the  decree  stated  merely  that 
the  Court  was  of  opinion  that  the  licenses  set  up  by  the 
appellant  were  valid,  and  gave  full  authority  to  navigate 
the  waters  of  the  United  States  for  the  purpose  of 
carrying  on  the  coasting  trade,  any  State  law  to  the 
contrary  notwithstanding. 

So  far  as  concerns  the  actual  ruling,  the  record  is, 
xp.  221.  2p.  229.  3p.  190.  4p.  239. 


76  THE   FEDERAL   POWER  OVER 

therefore,  substantially  free  from  doubt.  The  decree 
establishes  that  navigation  is  within  the  commercial 
powers  of  Congress,  and  that  a  Federal  coasting  license 
is  a  sufficient  authority  to  navigate  the  public  waters  of 
a  State.1 

It  has  been  common,  however,  to  assume  that  the  de- 
cision went  far  beyond  a  determination  of  this  narrow 
issue.  It  is  said  that  the  language  of  the  opinion  is  un- 
ambiguous, —  why  then  should  not  its  words  be  literally 
accepted  and  applied  in  their  natural  meaning? 

The  answer  to  this  question  is  not  far  to  seek.  The 
natural  meaning  of  the  words  is  not  now  what  it  was 
when  the  opinion  was  written.  Within  a  few  years  after 
this  decision  the  whole  economic  situation  was  changed 
by  the  introduction  of  railroads.  Marshall  could  in 
1824  safely  frame  his  definition  of  commerce  in  the 
broadest  terms,  because  commerce  itself  was  a  narrow 
operation.  When  easier  means  of  intercourse  brought 
the  States  closer  together,  even  judges  who  sat  on  the 
bench  with  Marshall  differed  under  the  new  conditions, 
as  to  the  meaning  of  the  language  in  this  case.2 

One  thing,  however,  is  clear  —  the  Federal  power 
does  not  even  yet  cover  all  intercourse  for  purposes  of 
trade,  nor  are  the  States  wholly  excluded  from  power 
to  legislate  upon  the  subject.  Indeed,  there  never  was 
a  time  when  the  doctrine  of  Gibbons  v.  Ogden  —  if  the 

1  Opinion  of  Mr.  Justice  Catron  in  License  Cases  (U.  S.,  1847),  5  How. 
603.  Opinion  of  Mr.  Chief  Justice  Taney  in  Wheeling  Bridge  Case  (U.  S., 
1851),  13  How.  585.  Opinion  of  Justices  Clifford,  Wayne  and  Davis  in 
Gilman  v.  Philadelphia  (U.  S.,  1865),  3  Wall.  739. 

"What  is  the  Test  of  a  Regulation  of  Foreign  or  Interstate  Commerce?  " 
by  Mr.  Louis  M.  Greeley,  1  Harvard  Law  Review,  159. 

2  5  How.  604. 


CARRIERS  AND   CORPORATIONS  77 

words  of  the  opinion  be  literally  accepted  in  their 
modern  sense,  —  could  be  generally  applied  to  actual 
conditions  of  foreign  and  interstate  commerce,  while 
as  to  commerce  with  the  Indian  tribes  an  entirely  dif- 
ferent rule  prevailed.1 

The  decision  must  be  read  in  its  relation  to  the  his- 
tory of  the  times  and  the  facts  of  the  case.  "No  judge, 
in  vindicating  the  judgment  of  the  court,  can  deliver 
maxims  of  universal  application  in  every  sentence,  or 
oracles  which  may  be  read  in  two  ways,  one  applicable 
to  the  case  before  him,  the  other  not.  To  sever  the 
arguments  of  a  judge  from  the  facts  of  the  case  to  which 
he  refers  will  often  lead  to  very  erroneous  conclusions. "  2 

What,  then,  was  " commercial  intercourse"  among  the 
States  as  Marshall  knew  it  ?  What  was  the  intention  of 
the  framers  of  the  Constitution  in  regard  to  this  inter- 
course ?  What  were  the  constitutional  doctrines  which 
in  1824  had  long  been  approved  by  "  contemporaneous 
and  continued  assent"? 

Commerce  in  1824  was  conducted  on  land  by  horse 
and  wagon  or  afoot ;  it  was  conducted  on  the  water  by 
navigation.  Land  communication  at  that  time  had  no 
direct  relation  to  the  Federal  government.  Then,  as 
now,  one  might  walk  or  drive  through  any  State  without 
becoming  conscious  of  Federal  regulation. 

With  navigation  conditions  were  different. 

1  Speech  of  Storrs  in  House  of  Representatives,  May  15,  1830.  Cong. 
Deb.,  Vol.  VI,  Part  II,  p.  1003;  Act  of  N.  Y.,  April  10,  1813,  2  R.  L.,  1813, 
Ch.  92,  p.  153;  Act  of  April  12,  1822,  Laws  of  1822,  Ch.  CCV,  p.  202; 
April  5,  181 7,  Laws  of  181 6-1 81 7,  Ch.  CXLII,  p.  149;  Speech  of  Senator 
Adams,  April  20,  1830,  Cong.  Deb.,  Vol.  VI,  Part  I,  p.  360.  House  Report 
No.  227,  21st  Cong.,  1st  Sess. 

2  Mr.  Justice  Grier  in  the  Passaic  Bridges,  3  Wall.  782,  791. 


78  THE   FEDERAL  POWER  OVER 

"Commerce  on  land  between  the  different  States  is  so  strikingly 
dissimilar,  in  many  respects,  from  commerce  on  water  that  it  is 
often  difficult  to  regard  them  in  the  same  aspect  in  reference  to 
the  respective  constitutional  powers  and  duties  of  the  State  and 
Federal  governments.  .  .  .  Maritime  transportation  requires 
no  artificial  roadway.  Nature  has  prepared  to  hand  that  portion 
of  the  instrumentality  employed.  The  navigable  waters  of  the 
earth  are  recognized  public  highways  of  trade  and  intercourse. 
No  franchise  is  needed  to  enable  the  navigator  to  use  them.  Again, 
the  vehicles  of  commerce  by  water  being  instruments  of  intercom- 
munication with  other  nations,  the  regulation  of  them  is  assumed 
by  the  National  legislature.  So  that  State  interference  with  trans- 
portation by  water,  and  especially  by  sea,  is  at  once  clearly  marked 
and  distinctly  discernible.  But  it  is  different  with  transportation 
by  land.  This,  when  the  Constitution  was  adopted,  was  entirely 
performed  on  common  roads,  and  in  vehicles  drawn  by  animal 
power.  No  one  at  that  day  imagined  that  the  roads  and  bridges 
of  the  country  (except  when  the  latter  crossed  navigable  streams) 
were  not  entirely  subject,  both  as  to  their  construction,  repair, 
and  management,  to  State  regulation  and  control.  ...  No  one 
then  supposed  that  the  wagons  of  the  country,  which  were  the 
vehicles  of  this  commerce,  or  the  horses  by  which  they  were  drawn, 
were  subject  to  national  regulation."  * 

The  decision  in  Gibbons  v.  Ogden  then  related  solely 
to  transportation  by  water;  it  held  that  navigation  was 
within  Federal  control. 

The  intention  of  the  framers  of  the  Constitution  in 
regard  to  this  intercourse  appears  from  the  history  of  the 
Convention,  and  from  public  discussions  of  the  period. 

By  the  accepted  rule  of  construction,  Federal  powers 
are  exclusive  of  State  jurisdiction  in  three  cases  only  — 
first,  when  the  Constitution  expressly  so  provides;  sec- 

1  Railroad  Company  v.  Maryland,  21  Wall.  456,  470.  Pullman's  Car 
Company  v.  Twombly,  29  Fed.  658,  666. 


CARRIERS  AND   CORPORATIONS  79 

ond,  when  the  grant  of  power  to  the  Union  is  accom- 
panied by  express  prohibitions  to  the  States;  third, 
when  the  Constitution  "  granted  an  authority  to  the 
Union,  to  which  a  similar  authority  in  the  States  would 
be  absolutely  and  totally  contradictory  and  repug- 
nant." * 

The  grant  of  power  to  Congress  over  commerce  was 
not  in  terms  exclusive. 

The  Constitution  contains  moreover  many  other 
grants  of  commercial  power  to  the  government,  such 
as  the  power  to  coin  money,  to  establish  uniform  laws  of 
bankruptcy,  to  grant  patents  and  copyrights,  to  regulate 
weights  and  measures,  etc.  These  powers  were  not  in 
express  terms  made  exclusive  and  they  were  not  ex- 
clusive. In  Maryland,  for  example,  the  Federal  cur- 
rency was  established  by  the  Act  of  December  21,  1812, 
"  recognizing  the  coin  of  the  United  States."  In 
Massachusetts  this  was  done  by  Act  of  February  25, 
1795,  "introducing  the  dollar  and  its  parts,"  and  other 
statutes  of  this  sort  may  be  found.2  The  Federal  power 
over  bankruptcy  was  never  considered  exclusive.3 
Patents  were  granted  by  a  number  of  States.4  That 
the  copyright  granted  by  New  Hampshire  in  the  Act 
of  Nov.  7,  1783,  was  considered  in  force  after  the 
adoption  of  the  Constitution  is  indicated  by  the  fact 

1  Hamilton  in  Federalist,  No.  32. 

2  New  York,  Act  of  Feb.  26,  1789,  Ch.  33,  p.  71 ;  Vermont,  Act  of  Oct.  19, 
1809,  Laws  of  1 796-1820,  Ch.  775. 

3  Sturges  v.  Crowninshield,  4  Wheat.  122. 

4  New  York,  Act  of  Jan.  27,  1797,  Ch.  9,  p.  9;  North  Carolina,  Act  of 
1801 ;  Massachusetts,  Act  of  June  15,  1793 ;  Maryland,  Act  of  Jan.  22,  1785. 
The  patent  law  of  1793  provided  that  before  an  applicant  could  receive  a 
Federal  patent  he  must  surrender  all  rights  derived  from  the  States.  1  U.  S. 
Stat.,  p.  322,  Sec.  6. 


80  THE  FEDERAL  POWER   OVER 

that  the  statute  is  included  in  the  laws  of  1815,1  a  book 
"published  by  authority"  and  containing  "all  the  gen- 
eral and  publick  statutes  now  in  force." 

In  place  of  this  limitation  the  States  were,  therefore, 
left  free  to  legislate,  except  so  far  as  their  power  was 
restricted  by  express  prohibitions  of  the  Constitution  or 
was  incompatible  with  the  power  given  to  the  Union. 

Over  the  express  prohibitions  of  the  Constitution  lit- 
tle doubt  has  arisen.  The  States  are  forbidden  to  tax 
imports  or  exports;  to  lay  duties  on  tonnage ;  to  impose 
inspection  charges  for  purposes  of  revenue;  to  coin 
money;  to  impair  the  obligation  of  contracts,  etc.  To 
this  extent  at  least  they  could  not  interfere  with  Federal 
authority. 

The  great  controversy  which  existed  from  the  time  the 
litigation  arose  which  was  terminated  in  Gibbons  v. 
Ogden  until  the  decision  of  Cooley  v.  Port  Wardens 2  in 
185 1,  was  whether  the  State  power  of  commercial  regu- 
lation was  in  any  way  restricted  by  the  grant  of  a 
similar  power  to  Congress.  Was  the  authority  given  to 
the  Union  "absolutely  and  totally  repugnant"  to  similar 
authority  in  the  States  ? 

Hamilton's  illustration  of  such  repugnancy  is  in  the 
Federal  power  "to  establish  an  uniform  rule  of  natural- 
ization throughout  the  United  States."  Of  this  pro- 
vision he  says  that  it  "must  necessarily  be  exclusive: 
because  if  each  State  had  power  to  prescribe  a  distinct 
rule,  there  could  be  no  uniform  rule."  3    Attorney- Gen- 

1  Laws  of  New  Hampshire,  1815,  p.  365.  See  dissenting  opinion  of  Mr. 
Justice  Thompson  in  Wheaton  v.  Peters,  8  Pet.  591,  658. 

2  12  How.  299. 

3  Federalist,  No.  32. 


CARRIERS  AND   CORPORATIONS  81 

eral  Wirt  based  his  argument  in  Gibbons  v.  Ogden  upon 
this  method  of  construction,  saying  that  "  regulation  of 
that  commerce  which  pervades  the  Union,  necessarily 
implies  uniformity,  and  the  same  result,  therefore,  fol- 
lows as  if  the  word  had  been  inserted"  in  the  grant  of 
power  to  Congress.1 

Now,  it  is  not  difficult  to  ascertain  in  what  respect  the 
framers  of  the  Constitution  contemplated  uniformity 
of  commercial  regulation.  The  subject  met  with  the 
widest  public  discussion,  and  the  Constitutional  Con- 
vention itself  was  brought  about  by  the  recognized 
necessity  of  such  a  system.  Madison's  resolution  in  the 
Virginia  House  of  Delegates  and  the  report  of  the  An- 
napolis Commissioners  urged  uniformity  of  regulation, 
and  in  the  debates  thus  aroused  the  nature  of  the  com- 
mercial powers  contemplated  is  well  denned.  From 
these  sources  it  appears  that  under  a  form  of  expression 
sufficiently  broad  to  give  Congress  power  within  certain 
limits,  to  prevent  conflicting  and  discriminating  State 
legislation,  the  Convention  had  prominently  in  mind 
the  establishment  of  a  Federal  authority  competent  to 
regulate  foreign  relations;  to  control  navigation;  to  raise 
a  Federal  revenue  by  means  of  a  tariff,  and  to  pre- 
vent the  imposition  of  duties  by  particular  States  upon 
articles  imported  from  or  through  other  States.  To  this 
extent  the  Federal  power  of  commercial  regulation  was 
undoubtedly  a  unit  incapable  of  division.  This  was 
what  Madison  meant  when  he  used  this  phrase  in  the 
Constitutional  Convention,2  and  it  was  to  regulations 

1  p.  178. 

2  Elliot  Deb.,  Vol.  V,  p.  548 ;  Smith  v.  Turner,  7  How.  396. 

G 


82  THE   FEDERAL  POWER   OVER 

of  this  character  that  Monroe  referred  in  1822  when 
he  said  that:  — 

"  Commerce  between  independent  powers  or  communities  is 
universally  regulated  by  duties  and  imposts.  It  was  so  regulated 
by  the  States  before  the  adoption  of  this  Constitution,  equally  in 
respect  to  each  other  and  to  foreign  powers.  The  goods  and 
vessels  employed  in  the  trade  are  the  only  subjects  of  regulation. 
It  can  act  on  none  other."  1 

When  the  Court  in  1824  held  that  the  Federal  power 
over  commerce  is  indivisible,  it  referred  to  operations  of 
commerce  which  had  always  been  considered  within  this 
rule.  To  this  doctrine,  and  to  no  other,  had  there  been 
contemporaneous  and  long-continued  assent.  At  the 
very  time,  however,  that  the  rule  was  announced,  a  dis- 
tinction was  made,  as  has  been  shown,  between  trans- 
portation and  navigation,  —  Marshall's  broad  defi- 
nition of  commerce  did  not  include  transportation  in  its 
relation  to  the  carrier.  This  is  not,  and  at  that  time 
had  never  been  considered  as,  a  part  of  commerce. 

"Commerce  has  a  definite  signification.  It  means  the  ordinary 
buying  and  selling,  and  bartering,  between  the  citizens  of  the  same 
country,  and  the  citizens  of  one  country  with  the  citizens  of  another 
country,  and  it  means  no  more.  Universal  usage  has  fixed  its 
boundaries  so  permanently,  they  cannot  be  shaken  by  any  artificial 
or  sophistical  argument." 2 

"Trade  and  commerce  actually  consist  in  buying  and  selling, 
though  they  may  perhaps  be  also  said  to  include  certain  necessary 

1  Message  to  Congress,  May  4,  1822.  See  also  speech  of  William  H. 
Crawford  in  Senate,  Feb.  11,  181 1.     Annals  nth  Cong.,  3d  Sess.,  pi.  139. 

2  Speech  of  William  Smith,  Senator  from  North  Carolina,  April  n,  1828, 
Cong.  Deb.,  Vol.  IV,  Part  I,  pi.  647.  Senator  Stanford,  April  26,  1886, 
Vol.  17,  Cong.  Rec,  Part  IV,  p.  3287. 


CARRIERS  AND   CORPORATIONS  83 

incidents  of  buying  and  selling,  as  for  example,  the  carriage  of 
goods  bought  and  sold  from  the  seller  to  the  buyer.  ...  It  is 
only,  however,  in  its  relation  to  the  buyer  and  seller  of  goods  that 
the  carriage  of  such  goods  can  be  said  to  be  an  incident  to  the  buy- 
ing and  selling  of  them."  * 

The  Supreme  Court  has  apparently  held  this  view  in 
its  decisions  that  the  right  of  shipper  and  traveller  to  send 
goods,  or  to  go,  from  one  State  to  another,  originates  not 
only  in  State  law,  but  is  a  right  which  every  citizen  is 
entitled  to  exercise  under  the  Constitution,2  while  the 
duty,  and,  therefore,  the  right  of  the  carrier  to  transport 
goods  by  land  from  State  to  State  before  the  adoption  of 
the  Interstate  Commerce  Act,  originated  in  State  law 
alone.3 

In  regard  to  navigation  other  considerations  con- 
trolled. John  Randolph  said  that  the  proximate  as  well 
as  the  remote  cause  of  the  existence  of  the  Federal  gov- 
ernment, was  the  necessity  of  a  single  authority  which 
could  regulate  foreign  commerce.4  It  was  necessary, 
too,  that  the  Federal  government  be  given  authority  to 
raise  a  revenue,  and  the  accomplishment  of  either  of 
these  objects  compelled  the  grant  of  authority  to  that 
government  to  regulate  navigation,  both  foreign  and 
coastwise.    All  this  appears  over  and  over  again  in  the 

1  "The  Northern  Securities  Case,"  by  Prof.  C.  C.  Langdell,  16  Harvard 
Law  Review,  539,  544.  See  also  decision  of  Judge  Peter  S.  Grosscup,  in 
United  States  v.  Swift  &  Co.  (1903),  122  Fed.  529,  531,  532. 

2  Crandall  v.  Nevada  (U.  S.,  1867),  6  Wall.  35;  Case  of  the  State  Freight 
Tax,  15  Wall.  232;  see  Crutcher  v.  Kentucky  (1890),  141  U.  S.  47. 

3  Bowman  v.  Chicago,  &c,  Ry.  Co.  (1885),  115  U.  S.  611,  615. 

4  Speech  in  House  of  Representatives  Jan.  3,  1824.  Annals  18th  Cong., 
Vol.  I,  1299.  "  It  is  obvious  to  even  the  most  superficial  observer  that  the 
commerce  of  the  United  States  with  foreign  countries  ought  to  be  regulated 
and  protected  by  proper  treaties  to  be  negotiated.  No  separate  State  can 
treat."     American  Museum,  January,  1787. 


84  THE   FEDERAL  POWER   OVER 

writings  of  that  period.  Madison  in  the  introduction  to 
his  report  of  the  debates  of  the  Constitutional  Conven- 
tion says : — 

"The  want  of  authority  in  Congress  to  regulate  commerce  has 
produced  in  foreign  nations,  particularly  Great  Britain,  a  monopo- 
lizing policy,  injurious  to  the  trade  of  the  United  States,  and 
destructive  to  their  navigation ;  the  imbecility  and  anticipated  dis- 
solution of  the  Confederacy  extinguishing  all  apprehensions  of  a 
countervailing  policy  on  the  part  of  the  United  States.  The  same 
want  of  a  general  power  over  commerce  led  to  an  exercise  of  the 
power,  separately,  by  the  States,  which  not  only  proved  abortive, 
but  engendered  rival,  conflicting,  and  angry  regulations.  Be- 
sides the  vain  attempts  to  supply  their  respective  treasuries  by 
imposts,  which  turned  their  commerce  into  the  neighbouring  ports, 
and  to  coerce  a  relaxation  of  the  British  monopoly  of  the  West 
India  navigation,  which  was  attempted  by  Virginia,  the  States 
having  ports  for  foreign  commerce  taxed  and  irritated  the  adjoin- 
ing States  trading  through  them,  as  New  York,  Pennsylvania, 
Virginia,  and  South  Carolina.  Some  of  the  States,  as  Connecticut, 
taxed  imports  from  others,  as  from  Massachusetts  which  complained 
in  a  letter  to  the  executive  of  Virginia,  and  doubtless  to  those  of 
other  States.  In  sundry  instances,  as  of  New  York,  New  Jersey, 
and  Maryland,  the  navigation  laws  treated  the  citizens  of  other 
States  as  aliens."  * 

The  only  way  in  which  the  hostile  legislation  of  other 
countries  could  be  met  would  be  by  a  power  which  could 
prohibit  access  to  all  the  States  alike  or  grant  it  to 
all,  as  circumstances  might  require.2  In  the  language 
of  Adams,3  "if  monopolies  and  exclusions  are  the  only 
arms  against  monopolies  and  exclusions"  the  venture 

1  Madison  Papers,  Elliot  Deb.,  Vol.  5,  p.  119. 

2  Curtis,  "Constitutional  History,"  Vol.  I,  p.  186  (2d  ed.). 

3  Letter  to  Jefferson,  Aug.  7,  1785 ;  Letter  to  Jay,  June  26,  1785.  Works, 
Vol.  VIII,  pp.  291,  273. 


CARRIERS  AND   CORPORATIONS  85 

should  be  made.  "It  was  a  miserable  policy  to  be 
forced  to  adopt,"  says  Mr.  Fiske,  "for  such  restrictions 
upon  trade  inevitably  cut  both  ways,"  but  no  other 
course  was  open.1 

The  difference  in  the  nature  of  Federal  control  over 
the  two  branches  of  commerce  was,  therefore,  that  for- 
eign commerce  was  to  be  controlled  not  alone  for  the 
protection  of  buyer  and  seller,  but  navigation  itself  was 
to  be  regulated.  It  was  intended  furthermore,  that, 
so  far  as  concerned  foreign  commerce  and  navigation, 
Congress  should  have  the  right  to  determine  who  could 
engage  in  these  operations,  —  in  other  words,  that  in 
this  field  and  for  international  purposes,  Congress  could 
establish  monopolies  and  exclusions. 

Communication  between  the  different  ports  of  every 
nation  is  entirely  within  the  power  of  that  nation. 

"The  policy  of  most  countries  has  been  to  secure  this  domestic 
navigation  to  their  own  people.  The  extensive  coasts,  the  im- 
mense bays  and  numerous  rivers  of  the  United  States  have  already 
made  this  an  important  object,  and  it  must  increase  with  our  popu- 
lation. As  the  places  at  which  the  cargoes  of  coasting  vessels  are 
delivered  must  be  supplied  with  American  produce  from  some  port 
of  the  Union,  and  as  the  merchant  can  always  have  American  bot- 
toms to  transport  the  goods  of  the  producing  State  to  the  State 
consuming  them,  no  interruption  to  the  market  of  the  planters 
and  farmers  can  be  apprehended  from  prohibiting  transportation 
in  foreign  bottoms  from  port  to  port  within  the  United  States."  2 

1  Fiske,  "Critical  Period,"  p.  146  (ed.  1897).  See  also  "Inquiry  into 
the  Principles  on  which  a  Commercial  System  for  the  United  States  should 
be  Founded."  Read  before  the  Society  for  Political  Inquiries  at  the  House 
of  Benjamin  Franklin,  Philadelphia,  May  11,  1787.  Published  anonymously 
but  credited  to  Tench  Coxe. 

2  "An  Inquiry  into  the  Principles  on  which  a  Commercial  System  for 
the  United  States  should  be  Founded,"  supra. 


86  THE   FEDERAL  POWER  OVER 

The  policy  sometimes  advocated  1  in  regard  to  inter- 
state commerce  as  a  means  of  trust  regulation  was  in 
fact  intended  by  the  framers  of  the  Constitution  as  a 
means  of  regulating  international  relations,  —  but  for  in- 
ternational purposes  only.  In  other  relations  the  right 
of  navigation  does  not  come  from  the  Federal  govern- 
ment,2 and  no  Federal  franchise  is  needed  for  its  exercise.3 

Among  Americans  no  distinctions  could  be  made  and 
no  exclusive  rights  granted  by  Congress.  "The  wise 
policy  of  our  Constitution  admits  of  no  such  monop- 
olies. "  4  "Monopolies,  perpetuities,  and  class  legis- 
lation are  contrary  to  the  genius  of  free  government, 
and  ought  not  to  be  allowed.  Here  there  is  no  room 
for  favored  classes  or  monopolies;  the  principle  of  our 
government  is  that  of  equal  laws  and  freedom  of  in- 
dustry." 5 

The  "miserable  policy"  which,  as  Mr.  Fiske  says, 
Congress  was  "forced  to  adopt"  in  relation  to  foreign 
nations,  was,  therefore,  never  considered  possible  in 
relation  to  the  different  States.  The  speech  which  John 
Randolph  made  in  the  House  of  Representatives  on 
January  30,  1824,  treats  of  the  difference  in  this  respect 
between  the  powers  of  Congress  over  foreign  and  inter- 
state commerce. 

1  Speech  of  Attorney-General  Knox  at  Pittsburg,  Oct.  14,  1902,  36 
Cong.  Rec,  p.  413;  First  Annual  Report  of  U.  S.  Commissioner  of  Corpo- 
rations, Dec.  21,  1904.     Platform  of  Democratic  Party,  1904. 

2  Gibbons  v.  Ogden,  9  Wheat.  1,  211,  227. 

3  Railroad  Company  v.  Maryland,  21  Wall.  456,  470. 

4  "Thoughts  on  the  Commerce  of  the  United  States,"  by  John  Swanwick, 
American  Museum,  August,  1792. 

Answer  to  Mason's  objections  by  James  Iredell ;  Ford,  • '  Pamphlets  on  the 
Constitution,"  357. 

5  First  annual  message  of  President  Johnson,  —  the  production  of  George 
Bancroft:  see  American  Historical  Review,  Vol.  11,  p.  547>  ib*d.  951. 


CARRIERS  AND   CORPORATIONS  87 

"If,  indeed,"  Mr.  Randolph  said,  "we  have  the  power  which  is 
contended  for  by  gentlemen  under  that  clause  of  the  Constitution 
which  relates  to  the  regulation  of  commerce  among  the  several 
States,  we  may,  under  the  same  power,  prohibit,  altogether,  the 
commerce  between  the  States,  or  any  portion  of  the  States,  or  we 
may  declare  that  it  shall  be  carried  on  only  in  a  particular  way, 
by  a  particular  road,  or  through  a  particular  canal ;  or  we  may  say 
to  the  people  of  a  particular  district,  you  shall  only  carry  your 
produce  to  market  through  our  canals,  or  over  our  roads,  and  then, 
by  tolls  imposed  upon  them,  we  may  acquire  power  to  extend  the 
same  blessings  and  privileges  to  other  districts  of  the  country. 
.  .  .  Sir,  there  is  no  end  to  the  purposes  that  may  be  effected 
under  such  constructions  of  power.  ...  If  we,"  in  Virginia, 
"should  chance  to  encounter  the  displeasure  of  the  Government, 
under  these  constructions  of  power,  they  may  say  to  every  wagoner 
in  North  Carolina,  you  shall  not  carry  on  any  commerce  across 
the  Virginia  line,  in  wagons  or  carts,  because  I  have  some  other 
object  to  answer,  by  a  suppression  of  that  trade.  Are  gentlemen 
prepared  for  this  ?  "  1 

To  the  question  there  could  then  be  but  one  answer. 
No  one  at  that  time  claimed  for  the  Federal  government 
the  broad  powers  over  commerce  among  the  States  which 
it  possessed  over  foreign  commerce  and  navigation.  It  is 
a  very  modern  view  of  the  Constitution  that  Congress 
cannot  only  prescribe  the  manner  in  which  interstate 
commerce  may  be  conducted,  but  it  may  determine  the 
qualifications  which  those  must  possess  who  would  en- 
gage therein;  that  is,  that  Congress  may  confine  the 
right  to  a  favored  class,  be  the  class  large  or  small. 
This  we  may  be  entirely  sure  was  not  the  intention  of  the 
framers  of  the  Constitution.2     "In  one  of  its  most  im- 

1  Annals  18th  Cong.,  1st  Sess.,  Vol.  I,  pi.  1307;  see  speech  of  Mr.  Fitz- 
simmons  in  House  of  Representatives,  Jan.  3,  1792. 

2  See,  for  example,  article  "On  Monopolies,"  American  Museum,  Sep- 
tember, 1792, 


88  THE   FEDERAL  POWER  OVER 

portant  aspects,  the  Revolution  was  a  deadly  blow 
aimed  at  the  old  system  of  trade  restrictions.  It  was 
to  a  certain  extent  a  step  in  realization  of  the  noble  doc- 
trines of  Adam  Smith."  1 

The  Federal  government  not  only  was  without  power 
to  establish  monopolies  of  interstate  transportation,  but 
it  could  not  even  interfere  with  the  monopolies  of  such 
transportation  which  were  established  by  the  States. 
Local  self-government  was  the  theory  of  the  Constitu- 
tion. If  State  monopolies  were  wrong,  it  was  by  the 
States  that  they  should  be  abolished.  The  motion 
which  was  made  in  the  Second  Congress  to  permit  pro- 
prietors of  stages  employed  in  carrying  the  mails,  to 
carry  passengers  also,  was  lost  as  being  beyond  the 
power  of  Congress.2 

Gibbons  v.  Ogden  destroyed  State  monopolies  of 
coasting  navigation,  but  had  no  effect  on  State  monopo- 
lies of  interstate  transportation  by  land,  or  by  water 
when  not  conducted  coastwise.  The  purpose  of  the 
Constitution  was  to  establish  "an  unrestrained  inter- 
course between  the  States"3  "on  the  basis  of  equal 
privileges."  4  State  tariffs  and  the  conflicting  and  dis- 
criminating State  legislation  which  interfered  with  free 
trade  in  the  goods  of  the  several  States  were,  therefore, 
to  be  abolished,  but,  so  far  as  concerned  transportation 
among  the  States  viewed  from  the  standpoint  of  the 
carrier,  the  Federal  power  extended  no  further  than  the 

1  Fiske,  "Critical  Period,"  p.  140;  see  "Causes  of  the  American  Revo- 
lution," by  Professor  James  A.  Woodburn,  Johns  Hopkins  University 
"Studies  in  Historical  and  Political  Science,"  Vol.  X,  p.  22;  Franklin, 
"Causes  of  American  Discontent,"  Works  (Putnam),  Vol.  IV,  p.  97. 

2  Annals  2d  Cong.,  1792,  pp.  303-309. 

3  Federalist,  No.  11  (Ford,  p.  69).  4  Federalist,  No.  7  (Ford,  p.  37). 


CARRIERS  AND   CORPORATIONS  89 

control  of  that  part  of  it  included  in  navigation  —  in 
other  words  to  the  coasting  trade.  This  was  involved 
in  the  regulation  of  foreign  commerce,1  but  there  were 
other  good  reasons  for  giving  it  into  national  control. 

"Owing  to  the  extent  of  our  coast,  danger  exists,  that, 
in  conducting  this  trade,  the  revenue  will  be  defrauded; 
and  with  a  view  to  prevent  such  defrauding,  the  Con- 
stitution empowers  Congress  to  '  regulate '  this  branch 
of  commerce.  And  to  this  the  power  extends,  and  no 
farther."  2 

This  was  the  view  also  of  Mr.  Justice  Johnson.  "It 
is,"  he  said,  "to  confer  on  her  [a  vessel]  American  privi- 
leges, as  contradistinguished  from  foreign;  and  to  pre- 
serve the  government  from  fraud  by  foreigners,  in  sur- 
reptitiously intruding  themselves  into  the  American 
commercial  marine,  as  well  as  frauds  upon  the  revenue 
in  the  trade  coastwise,  that  this  whole  system  is  pro- 
jected." 3 

Here  then  is  the  explanation  of  the  decision  in  Gib- 
bons v.  Ogden.  The  State  law  was  invalid,  not  because 
it  established  a  monopoly  of  interstate  transportation, 
but  because  it  amounted  to  a  regulation  of  the  coasting 
trade,  a  subject  which  had  wholly  been  confided  to 
Congress. 

It  is  true,  as  already  noticed,  that  the  decree  passed 
only  upon  the  effect  of  the  coasting  license.  For  this 
reason  it  has  often  been  said  that  the  case  turned  not 

1  Lord  v.  S.  S.  Co.,  102  U.  S.  541.     Federalist,  No.  42. 

2  Speech  of  Silas  Wood  in  House  of  Representatives,  Jan.  15,  1824; 
Annals  18th  Cong.,  1st  Sess.,  Vol.  I,  pi.  1055.  See  also  remarks  of  Madi- 
son in  Virginia  Legislature  quoted  by  Andrew  Stevenson  in  House  of  Rep- 
resentatives, Jan.  29,  1824,  ibid.  1275. 

3  Gibbons  v.  Ogden,  9  Wheat.  232. 


g0  THE   FEDERAL  POWER   OVER 

upon  the  nature  of  the  constitutional  grant  of  power  to 
Congress,  but  rather  upon  the  construction  of  a  Federal 
statute.  This  is  true  in  a  narrow  sense  only.  In  a 
broader  sense,  the  decision  involved  a  determination  of 
the  nature  of  the  commercial  power  given  to  Congress. 
It  was  at  best  a  forced  construction  which  made  a  coasting 
license  grant  a  right  of  navigation,  and  upon  this  branch 
of  the  case,  Mr.  Justice  Johnson  dissented.  "It  is  im- 
possible," he  said,  "with  the  views  which  I  entertain  of 
the  principle  on  which  the  commercial  privileges  of  the 
people  of  the  United  States  among  themselves  rests, 
to  concur  in  the  view  which  this  court  takes  of  the  effect 
of  the  coasting  license  in  this  cause.  I  do  not  regard  it 
as  the  foundation  of  the  right  set  up  in  behalf  of  the 
appellant.  If  there  was  any  one  object  riding  over 
every  other  in  the  adoption  of  the  Constitution,  it  was 
to  keep  the  commercial  intercourse  among  the  States 
free  from  all  invidious  and  partial  restraints.  And  I 
cannot  overcome  the  conviction,  that  if  the  licensing 
act  was  repealed  to-morrow,  the  right  of  the  appellant 
to  a  reversal  of  the  decision  complained  of,  would  be  as 
strong  as  it  is  under  this  license."  * 

Chancellor  Sanford  of  New  York  made  the  same  criti- 
cism upon  Chief  Justice  Marshall's  opinion,  with  even 
greater  emphasis.  He  said  "that  terms  so  indefinite  as 
the  words,  'coasting  trade/  should  have  been  used  for  the 
purpose  of  establishing  rights  of  commerce,  between 
different  parts  of  the  nation  is  not  probable.  That  this 
should  have  been  done  without  any  known  motive, 
when  a  full  freedom  of  intercourse,  both  by  land  and 

1  p.  231- 


CARRIERS  AND  CORPORATIONS  91 

water,  existed  among  all  the  States,  is  a  supposition  still 
more  improbable.  To  expound  these  terms  of  this  law, 
thus  made,  as  a  grant  of  rights,  when  its  provisions  have 
a  direct  application  to  other  objects,  and  when  all  those 
provisions  have  full  effect,  as  restrictive  regulations, 
would  be  a  construction  widely  distant  from  the  apparent 
intention  of  the  legislature.  .  .  .  Still  more  without 
reason,  is  such  a  right  inferred  from  the  license,  when 
registered  vessels  have  the  rights  of  the  coasting  trade, 
and  yet  have  no  license."  * 

That  the  rule  of  the  case  was  restricted  to  the  coasting 
trade  appears  from  the  course  of  legislation  which  the 
States  pursued  after  this  decision. 

In  1848  Massachusetts  granted  the  exclusive  right 
to  run  steamboats  on  the  Merrimac  River  between 
Haverhill  and  Lawrence 2  and  in  1867  granted  an- 
other monopoly  on  the  same  river  between  Mitchell's 
Falls,  Lowell,  and  Lawrence.3  In  1856  the  State  of 
Georgia  granted  a  monopoly  on  the  Chattahoochee 
River.4 

The  explanation  of  this  legislation  lies  in  the  fact  that 
the  navigation  thus  monopolized  did  not  fall  within  the 
description  of  coasting  trade,  as  the  term  was  then  under- 
stood :  — 


Steamboat  Co.  v.  Livingston,  1  Hopk.  Ch.  149,  pp.  207-208.  "We 
are  inclined  to  say  .  .  .  that  the  term  license  is  to  be  considered  as  of  not 
more  extensive  meaning  than  letters  patent,  and  confers  no  more  right  or 
authority,  in  the  former  case  than  in  the  latter ;  that  is,  it  merely  permits  the 
free  use  of  the  thing  patented,  or  of  the  waters  licensed,  provided,  however, 
that,  in  either  case  the  grant  meets  with  no  conflicting  right  of  a  third  party." 
New  York  Evening  Post,  March  18,  1824. 

2  Act  of  May  3,  1848,  Ch.  249,  p.  741. 

3  Act  of  April  1,  1867,  Ch.  115,  p.  546. 

4  Act  of  March  1,  1856,  No.  211,  p.  270. 


92  THE   FEDERAL   POWER   OVER 

"We  should  say  that  'coasting  license'  ...  by  the  very  term 
itself,  is  confined  to  the  navigation  of  waters  bordering  on  the  sea- 
shore, and  never  extends  to  those  of  rivers  passing  from  the  in- 
terior of  the  country  to  the  ocean." 

This  comment,  made  in  the  New  York  Evening  Post, 
March  18,  1824,  represents  a  view  then  widely  held.1 

It  is  true,  that  on  the  7th  of  April,  1824,  the  Attorney- 
General  of  New  York  rendered  an  opinion  to  the  As- 
sembly in  which,  with  some  hesitation,  he  held  that 
navigation  on  the  Hudson  River  between  New  York 
and  Albany  fell  within  the  Federal  power  to  regulate 
the  coasting  trade.2  This  rule  did  not  at  once  meet 
with  general  acceptance,  and  in  any  event  would  have 
no  application  to  navigation  of  purely  interior  waters. 
Such  navigation  might  be  interstate  transportation,  but 
it  was  not  part  of  the  coasting  trade,  and  the  States, 
therefore,  claimed  full  power  of  regulation  over  it. 
Upon  similar  grounds  Federal  courts  held  that  the  con- 
duct of  a  ferry  across  a  navigable  river,  not  being  coast- 
ing trade,  was  not  within  Federal  license  laws,3  and  that 
the  possession  of  a  Federal  coasting  license  did  not 
authorize  ferriage   in    violation  of   State   laws.4     For 

1  See  National  Advocate  (N.  Y.),  March  12,  1824.  "The  coast  is  the 
shore.  To  coast  is  to  navigate  along  the  shore/'  The  William  Pope 
Newb.  Adm.,  250,  259. 

2  Albany  Argus,  Friday,  April  9,  1824. 

3  United  States  v.  Steamboat  James  Morrison  (1846),  1  Newb.  Adm. 
241.  Under  the  power  to  regulate  commerce  Congress  cannot  interfere 
with  the  ferries  of  a  State,  except  so  far  as  they  are  used  for  carrying  on 
the  coasting  trade,  nor  with  navigation  on  canals  constructed  by  a  State, 
or  upon  inland  lakes  or  rivers.  North  River  Steamboat  Co.  v.  Livingston, 
3  Cow.  7i3(N.Y.,  1825). 

4  Wiggins  Ferry  Co.  v.  East  St.  Louis  (1882),  107  U.  S.  365;  Conway 
v.  Taylor's  Executor  (1861),  1  Black  603;  Newport  v.  Taylor's  Executors 
(Ky.,  1855),  I0  B-  Monroe,  699;  Chilvers  v.  People  (1862),  11  Mich.  43; 
Ferry  Co.  v.  Wilson  (1877),  28  N.  J.  Eq.  537;  Carroll  v.  Campbell  (1891), 
108  Mo.  550. 


CARRIERS  AND   CORPORATIONS  93 

many  years  it  was  common  in  admitting  new  States 
into  the  Union  to  provide  in  the  act  of  admission  that 
the  navigable  waters  within  the  new  State  should  be 
common  highways  forever  free  to  all  citizens.  This 
clause  appears  in  the  organic  acts  of  no  less  than  eleven 
States.1  Unless  the  States  had  possessed  the  power 
which  Massachusetts  and  Georgia  claimed,  such  legis- 
lation on  the  part  of  the  Federal  government  would 
have  been  unnecessary. 

The  grant  of  monopolies  of  ferriage,  also,  not  being 
part  of  the  coasting  trade,  continued  by  the  States.  The 
number  of  such  monopolies  created  in  the  last  eighty 
years,  it  is  impossible  to  estimate,  for  in  some  States  ex- 
clusive privileges  of  ferriage  have  been  given  upon  com- 
pliance with  general  laws.  The  extent  of  the  practice  is 
indicated,  however,  by  the  fact  that  during  the  period 
of  eighty  years  which  followed  the  decision  of  Gibbons 
v.  Ogden,  the  State  of  New  York  by  special  statutes 
granted  twenty-two  monopolies  of  ferriage  across  the 
State  line;  Vermont  granted  forty-one,  and  Pennsyl- 
vania eighty-four. 

In  the  meantime  the  grant  by  different  States  of  mo- 
nopolies   of    land    transportation    continued    unques- 

1  Indiana:  Act  of  May  7,  1800,  2  U.  S.  Stat.  58;  Act  of  April  19,  1816, 
Sec.  4,  3  U.  S.  Stat.  289;  Resolution  of  Dec.  11,  1816,  3  id.  399.  Illinois: 
Act  of  Feb.  3,  1809,  2  U.  S.  Stat.  514;  Act  of  April  18,  1818,  Sec.  4,  3  U.  S. 
Stat.  428;  Resolution  of  Dec.  3,  1818,  id.  536.  Mississippi:  Act  of  March 
1,  1817,  Sec.  4,  3  U.  S.  Stat.  348;  Resolution  of  Dec.  10,  1817,  id.  472. 
Louisiana:  Act  of  Feb.  20,  1811,  Sec.  3;  2  U.  S.  Stat.  641;  Act  of  April  8, 
1812,  id.  701.  Alabama:  Act  of  March  2,  1819,  Sec.  6,  3  U.  S.  Stat.  489; 
Resolution  of  Dec.  14,  1819,  id.  608.  Missouri:  Act  of  March  6,  1820, 
Sec.  2,  3  U.  S.  Stat.  545.  Iowa:  Act  of  March  3,  1845,  Sec.  3,  5  U.  S.  Stat. 
742.  Wisconsin:  Act  of  Aug.  6,  1846,  Sec.  3,  9  U.  S.  Stat.  56.  Cali- 
fornia: Act  of  Sept.  9,  1850,  Sec.  3,  9  U.  S.  Stat.  452.  Oregon:  Act  of  Feb. 
14, 1859,  Sec.  2,  11  U.  S.  Stat.  383.  Minnesota:  Act  of  Feb.  26,  1857,  Sec.  2, 
11  U.  S.  Stat.  166. 


94 


THE   FEDERAL  POWER  OVER 


tioned.1  Some  grants,  like  that  made  by  Vermont  to 
Levi  Pease  in  1792,  expressly  contemplated  the  estab- 
lishment of  a  monopoly  of  interstate  transportation.2 

When  the  Erie  Canal  was  built  it  was  the  policy  of  the 
State  of  New  York  to  give  to  the  canal  a  monopoly  of  the 
transportation  of  merchandise  between  the  East  and  the 
West.  For  this  reason,  when  the  Utica  and  Schenectady 
Railroad  Company  was  incorporated,  it  was  expressly 
enacted  in  the  charter  of  the  company  that  "no  prop- 
erty of  any  description,  except  the  ordinary  baggage  of 
passengers,  shall  be  transported  or  carried  on  said 
road."  3 

Subsequently,  that  and  the  other  roads,  which  now 
form  part  of  the  New  York  Central  Railroad,  were 
authorized  to  transport  goods  during  the  suspension  of 
canal  navigation,  paying  the  Erie  Canal  Commissioners 
the  toll  which  would  have  been  required  had  the  goods 
been  carried  on  the  canal.4  In  1847,  these  roads  were 
authorized  to  transport  merchandise  during  the  whole 
year,  but  upon  payment  of  tolls  as  before.5  The  require- 
ment of  tolls  was  not  abolished  in  New  York  until  the 
completion  of  the  Erie  Railroad  in  1851,6  the  very  year 
in  which  Illinois  imposed  a  similar  charge  upon  rail- 

1  As  illustrations  of  this  sort  of  legislation  see:  N.  Y.  Act  of  Jan.  28, 
1828,  Ch.  21,  p.  14;  Act  of  April  21,  1828,  Ch.  306,  p.  399;  Act  of  April  21, 
1828,  Ch.  340,  p.  471;  Act  of  April  17,  1829,  Ch.  154,  p.  250;  Act  of  April 
27,  1829,  Ch.  276,  p.  404;  Act  of  April  19,  1830,  Ch.  263,  p.  288;  Act  of 
Feb.  16,  1831,  Ch.  43,  p.  41;  Act  of  March  24,  1831,  Ch.  83,  p.  in. 

2  Act  of  N.  Y.,  April  5,  1828,  Ch.  169,  p.  196;  Act  of  S.  C,  Dec.  19,  1835, 
Vol.  8,  Stats.  S.  C.  409;  Act  of  Ky.  Feb.  29,  1836,  Ch.  342,  pp.  426,  432- 

3  N.  Y.  Laws  of  1833,  Ch.  294,  pp.  462,  466. 

*  Laws  of  1844,  Ch.  335,  p.  518,  1  Rev.  Stats.  N.  Y„  3d  ed.,  p.  219, 
Part  I,  Ch.  IX,  title  2,  Sees.  40,  45. 
6  Laws  of  1847,  Ch.  270,  p.  298. 
8  Laws  of  185 1,  Ch.  497,  p.  927. 


CARRIERS  AND   CORPORATIONS  95 

roads  competing  with  the  Illinois  and  Michigan  Canal.1 
It  appears  from  remarks  made  in  Congress  that  the  tolls 
imposed  by  New  York  rested  upon  transportation  of 
grain  from  the  Northwest  and  other  interstate  freight,2 
and  this  was  doubtless  true  also  of  the  tolls  imposed  by 
Illinois. 

In  1833  the  State  of  New  Jersey  granted  to  the  Cam- 
den &  Amboy  Railroad  Company  a  monopoly  of  trans- 
portation between  New  York  and  Philadelphia.3  This 
provision  was  sustained  in  the  State  courts.4  In  1861 
it  was  found  that  this  company  was  unable  to  meet  the 
demands  for  the  transportation  of  troops  and  supplies, 
and  a  government  quartermaster  impressed  another 
railroad  and  passed  over  it  some  eighteen  thousand  men 
and  four  hundred  tons  of  freight.  For  this  the  Camden 
&  Amboy  Company  brought  suit  against  the  road  so 
impressed  and  recovered  from  it  the  money  received 
for  this  service.5 

This  monopoly  aroused  wide  public  interest  and 
opposition  at  a  very  critical  period,  but  there  was  no 
suggestion  that  it  was  illegal,  and  it  was  only  destroyed 
by  the  passage  of  a  Federal  statute,  giving  all  railroads 
operated  by  steam  the  right  to  carry  goods  and  pas- 
sengers from  State  to  State.6 

1  Act  of  Illinois,  Feb.  7,  1851,  Priv.  Laws,  1851,  p.  47. 

2  Remarks  of  Senator  Hale,  Feb.  14,  1865,  Cong.  Globe,  38th  Cong., 
2d  Sess.,  794. 

3  Acts  of  N.  J.  1829-1830,  83;  Harrison  Comp.  N.  J.  Laws  (1833),  284. 

4  Camden  &  Amboy  R.R.  Cases  (1862),  15  N.J.  Eq.  13;  (1863)  16 
id.  321  (1867),  18  id.  546. 

6  See  speech  of  Senator  Sumner,  Feb.  14,  1865,  Cong.  Globe,  38th  Cong., 
2d  Sess.,  793;  Senator  Chandler,  May  29,  1866,  Cong.  Globe,  39th  Cong., 
1st  Sess.,  2870;  Senator  Foot,  Jan.  15,  1866,  id.  227.  Remarks  of  James  A. 
Garfield,  Cong.  Rec,  45th  Cong.,  2d  Sess.,  Vol.  7,  Part  4,  p.  3406. 

8  Act  of  June  15,  1866,  U.  S.  Rev.  Stats.,  Sec.  5258. 


96  the  federal  power  over 

Clearly  then,  the  right  of  a  carrier  to  engage  in  inter- 
state commerce  was  not  at  that  time,  as  has  recently  been 
stated/  derived  solely  from  the  Federal  Constitution, 
but  was  a  right  which  a  State  might  grant,  or  in  some 
instances  withhold,  a  rule  which  is  in  harmony  with  the 
theories  of  the  Constitution  and  other  decisions  of  the 
Supreme  Court.2  The  rule  that  the  Federal  govern- 
ment can  also  by  statute  grant  the  right  to  a  carrier  by 
land  was  then  new  but  is  now  well  established.  The 
case  of  Gibbons  v.  Ogden  was  not  forgotten,  but  was 
considered  inapplicable  to  such  a  monopoly. 

In  view  of  this  history  of  constitutional  practice  it  is 
not  difficult  to  ascertain  the  meaning  of  Chief  Justice 
Marshall's  decision. 

There  was  an  open  question  in  the  early  days  of  the 
Constitution  whether  a  State  might,  under  its  powers  to 
regulate  its  internal  affairs,  grant  monopolies  of  naviga- 
tion within  its  limits,  or  whether  this  was  impliedly  for- 
bidden by  the  commerce  clause.  There  was  no  doubt 
that  by  this  clause  power  was  given  to  Congress,  to 
regulate  navigation,  foreign  and  coastwise,  and  to  pre- 
vent State  tariffs.  To  this  extent  the  Federal  power 
appears  at  all  times  to  have  been  considered  exclusive 
of  State  jurisdiction.  If  the  Federal  power  extended 
no  further  than  to  such  matters  as  were  obviously  within 
this  field,  the  power  throughout  its  whole  scope  was 
clearly  exclusive.     If  the  field  of  regulation  were  wider, 

1  Crutcher  v.  Kentucky,  141  U.  S.  47. 

2  Gibbons  v.  Ogden,  9  Wheat.  1,211;  Bowman  v.  Chicago,  &c,  Railway 
Company,  115  U.  S.  611.  Opinion  of  C.  J.  Savage  in  Steamboat  Co.  v. 
Livingston,  3  Cow.  713.  See  also  opinion  of  Chancellor  Sanford,  1  Hopk. 
Ch.  149. 


CARRIERS  AND   CORPORATIONS  97 

no  such  radical  rule  could  be  adopted,  but  a  construction 
must  be  found  which  would  be  capable  of  adaptation 
to  varying  conditions. 

Should  the  narrower  definition  be  taken,  the  question 
would  then  arise  whether  the  grant  of  such  a  monopoly 
as  Ogden  claimed  under  the  laws  of  New  York,  consti- 
tuted a  regulation  of  navigation. 

This  latter  question  is  the  one  with  which  the  Court 
dealt.  The  decision,  in  tone  and  doctrine,  therefore, 
takes  its  place  not  as  the  first  of  the  new  school  of  liberal 
construction,  but  rather  as  the  last  announcement  of  the 
earliest  school  of  constitutional  construction.  In  its 
implied  definition  of  commerce,  it  looks  backward,  not 
forward  —  it  belongs  to  the  era  of  the  stage  coach. 

There  is  an  interesting  question  how  far  subsequent 
decisions  have  been  influenced  by  a  literal  reading  of  the 
broad  expressions  of  this  case.  There  is  little  doubt  that 
this  influence  has  been  felt,  and  that,  in  part  at  least,  it 
explains  the  dissensions  in  later  cases.  "It  has  always 
appeared  to  me,"  said  Mr.  Chief  Justice  Taney  in  1846, 
"that  this  controversy,"  over  the  meaning  of  the  com- 
merce clause,  "has  mainly  arisen  out  of  that  case  " 
(Gibbons  v.  Ogden),  "and  that  this  doctrine  of  the 
exclusive  power  of  Congress,  in  the  sense  in  which  it 
is  now  contended  for,  is  comparatively  a  modern  one, 
and  was  never  seriously  put  forward  in  any  case  until 
after  the  decision  of  Gibbons  v.  Ogden,  although  it  has 
been  abundantly  discussed  since."  l 

In  1849  ^r-  Justice  Woodbury  said  that  "an  expan- 
sive, and  roving,  and  absorbing  construction  has,  since" 

1  License  Cases  —  Pierce  et  al.  v.  New  Hampshire,  5  How.  581. 

H 


98  THE   FEDERAL  POWER   OVER 

Gibbons  v.  Ogden,  "been  attempted  to  be  given  to  the 
grant  of  the  power  to  regulate  commerce,  apparently 
never  thought  of  at  the  time  it  was  introduced  into  the 
Constitution."  *  Notwithstanding  these  protests,  the 
tendency  of  the  Supreme  Court  has  been  to  give  the  ex- 
pressions of  the  opinion  as  literal  an  interpretation  as 
possible  under  conditions  which  made  an  entirely  literal 
application  impossible.  The  development  of  the  law 
will  be  followed  with  the  later  decisions.  In  the  mean- 
while to  understand  the  history  of  the  subject  it  is  im- 
portant to  notice  the  principles  to  which  the  case  of 
Gibbons  v.  Ogden  calls  attention. 

i.  Federal  control  over  the  three  branches  of  com- 
merce—  foreign,  interstate,  and  Indian  —  is  not  co- 
extensive. The  purposes  which  it  was  sought  to 
accomplish  in  respect  to  these  several  branches  of 
commerce  are  widely  different,  and  the  powers  of  the 
Federal  government,  being  commensurate  with  the 
objects  which  it  was  sought  to  attain,  differ  in  each 
instance  in  nature  and  extent. 

2.  Except  as  transportation  was  carried  on  by  coast- 
wise navigation,  interstate  carriers  were  originally  with- 
in the  jurisdiction  of  Congress  only  to  such  a  limited 
degree  as  might  be  necessary  to  prevent  restrictions 
upon  the  introduction  of  goods  from  other  States,  and 
possibly  to  prevent  interference  with  travellers.  Over 
the  business  of  interstate  carriage,  as  such,  Congress  had 
no  jurisdiction. 

"Congress,"  Mr.  Justice  Grier  said  in  a  later  case,  "has  the 
exclusive  power  to  regulate  commerce;  but  that  has  never  been 

1  Passenger  Cases,  7  How.  558. 


CARRIERS  AND   CORPORATIONS  99 

construed  to  include  the  means  by  which  commerce  is  carried  on 
within  a  State.  Canals,  turnpikes,  bridges,  and  railroads,  are  as 
necessary  to  the  commerce  between  and  through  the  several  States 
as  rivers,  yet  Congress  has  never  pretended  to  regulate  them."  l 

Besides  the  important  relations  to  constitutional  de- 
velopment which  have  been  considered,  the  case  of 
Gibbons  v.  Ogden  deserves  attention  by  reason  of  its 
place  in  political  history.  Counsel  for  defendant  in 
error  in  this  case  did  not  rest  upon  their  denial  of  the 
exclusive  nature  of  the  Federal  commercial  power,  but 
insisted  that  if  a  law  passed  by  a  State  in  the  exercise 
of  its  acknowledged  sovereignty  come  into  conflict  with 
a  law  passed  by  Congress  in  pursuance  of  the  Constitu- 
tion, they  affect  the  subject,  and  eachother,  like  equal 
opposing  powers. 

Thus,  eight  years  before  the  ordinance  of  South  Caro- 
lina, the  doctrine  of  Nullification  was  presented  to  the 
Supreme  Court.2 

In  the  opinion  of  the  Court  the  supremacy  of  Federal 
authority  and  the  exclusive  character  of  the  national 
power  of  regulation,  were  clearly  defined. 

In  reading  that  momentous  decision,  apprehending  as 
we  do  now  the  interests  which  wTere  at  stake,  and  with 
which  the  conclusion  was  pregnant,  one  cannot  help 
pausing  to  wonder  what  might  have  been  the  result  had 
that  decision  in  any  way  been  different  from  what  it  was. 
Had  the  utterance  of  the  Court  upon  the  powers  of  the 

1  The  Passaic  Bridges,  3  Wall.  792. 

2  The  same  subject  had  been  before  the  United  States  Circuit  Court  in 
South  Carolina  a  year  earlier,  and  the  decision  rendered  by  Mr.  Justice  John- 
son had  supported  the  national  authority.  Elkison  v.  Deliesseline,  2  Wheel. 
Cr.  Cas.,  56. 


ioo  THE   FEDERAL  POWER   OVER 

States  been  ambiguous;  had  expression  upon  the  rela- 
tion of  the  States  to  the  Federal  government  been 
avoided,  and  the  element  of  nationality,  which  was  in- 
volved, less  explicitly  been  disclosed  and  asserted;  had 
it  been  allowed  to  cripple  the  commercial  power  of  the 
nation  in  any  way,  —  where  would  the  influence  of  that 
decision  have  led  us  now  ?  We  may  find  some  sugges- 
tion of  an  answer  to  this  question  in  the  dissensions  of 
the  Court  in  New  York  v.  Miln,  in  the  Passenger  Cases, 
the  License  Cases,  and  in  the  statement  of  Mr.  Justice 
Barbour,  that  the  police  power  of  the  State  is  "complete, 
unqualified  and  exclusive." 

In  the  years  to  come,  said  Mr.  Wayne  MacVeagh,  it 
will  probably  be  recognized  that  among  Chief  Justice 
Marshall's  decisions  "none  will  surpass  in  permanent 
material  advantage  that  decision  which  determined  that 
the  power  to  regulate  commerce  resided  exclusively  in 
Congress,  and  must  be  kept  inviolate  from  any  intrusion 
by  the  States,  under  any  guise  whatever."  * 

1  Address  at  Marshall  Centennial,  reported  in  180  U.  S.  671. 


CARRIERS  AND  CORPORATIONS  101 


CHAPTER  IV 

DECISIONS   FROM    1824  TO    1851 

The  next  case  upon  the  subject  was  Brown  v.  Mary- 
land,1 decided  in  1827.  This  case  involved  the  validity 
of  a  law  of  Maryland  imposing  a  license  tax  upon  im- 
porters for  the  privilege  of  selling  imported  goods. 

The  State  law  was  held  unconstitutional  upon  two 
grounds.  In  the  first  place,  it  was  held  that  a  tax  upon 
the  sale  of  imported  goods  by  the  importer  and  in  original 
packages  amounted  to  a  tax  upon  imports,  such  as  was 
prohibited  by  the  express  provision  of  the  Constitution. 

It  is  sometimes  said  that  this  doctrine,  commonly 
called  the  "original  package"  rule  was  first  announced 
in  Brown  v.  Maryland.  This  is  a  mistake.  The  begin- 
nings of  the  rule  may  be  traced  to  State  statutes  adopted 
under  the  Articles  of  Confederation.2  Until  1822  the 
exemption  which  was  established  by  the  decision  in  this 
case  was  recognized  in  the  Maryland  statutes,3  and  the 
same  exemption  existed  under  the  statutes  of  Pennsyl- 
vania until  1824.4 

1  12  Wheat.  419. 

2  See  act  of  N.  Y.,  March  22,  1784.  Laws  of  1777-1784,  Ch.  10,  p.  599; 
Act  of  April  11,  1787,  Laws  of  1785-1788,  Ch.  81,  p.  509. 

3  Freund,  "Police  Power,"  Sec.  81. 

4  See  Pennsylvania,  Act  of  April  2,  1821,  Laws  of  1821,  Ch.  148,  p.  244, 
and  Supplement  of  March  4,  1824,  Laws  of  1824,  Ch.  31^.32.  The  first 
statute  imposed  a  license  tax  on  sale  of  foreign  goods,  but  excepted  from  its 
operation  importers  selling  in  original  packages.  The  supplement  abolished 
this  exception.     See  Biddle  v.  Commonwealth,  13  S.  &  R.  405. 


I02  THE   FEDERAL  POWER   OVER 

With  the  decision  that  the  State  law  of  Maryland  was 
unconstitutional  as  imposing  a  tax  upon  imports,  the 
Court  could,  and  under  the  early  views  of  the  Constitu- 
tion should,  have  stopped.  Aside  from  the  prohibition 
upon  taxation  of  imports  and  exports  the  Constitution 
imposed  no  limitations  upon  the  taxing  powers  of  the 
States.1  The  Federal  power  over  commerce,  Edmund 
Randolph  said,  extends  to  "little  more  than  to  establish 
the  forms  of  commercial  intercourse  between  the  States, 
and  to  keep  the  prohibitions  which  the  Constitution  im- 
posed upon  that  intercourse  undiminished  in  their  oper- 
ation; that  is,  to  prevent  taxes  on  imports  or  exports, 
preference  to  one  port  over  another  by  any  regulation  of 
commerce  or  revenue,  and  duties  upon  the  entering  or 
clearing  of  the  vessels  of  one  State  in  the  ports  of  an- 
other." 2  In  practice,  however,  the  application  even  of 
such  a  restricted  power  as  Randolph  outlined,  extends 
further  than  his  words  seem  to  imply.  There  is  no 
economic  line  which  corresponds  even  roughly  with  the 
State  boundaries.  "The  real  truth  is  that  a  very  nice 
line  cannot  be  drawn  between  the  Federal  government 
and  the  States.  .  .  ."  3  Complete  regulation  of  com- 
merce in  one  aspect  imperceptibly  extends  to  regulation 
of  all  commerce.  Federal  jurisdiction  under  the  com- 
merce clause  to  preserve  undiminished  the  operation  of 
that  constitutional  provision  which  forbids  State  taxa- 
tion of  imports,  amounts  in  substance  to  a  distinct 
limitation  by  the  commerce   clause  upon  the  taxing 

1  Federalist,  Nos.  32,  33. 

2  Opinion  rendered  to  President,  Feb.  12,  1791. 

3  Remarks  on  the  amendments  to  the  Federal  Constitution.  A  merican 
Museum,  February,  1789. 


CARRIERS  AND   CORPORATIONS  103 

powers  of  the  States.  This  was  the  second  ground  for 
the  decision,  and  here,  unconsciously  and  inevitably, 
began  the  extension  by  judicial  construction  of  the 
Federal  power  over  commerce. 

In  the  consideration  of  this  subject  the  debate  turned 
upon  the  question  whether  the  limitation  upon  the  States 
was  the  result  of  Federal  statute,  or  whether  the  power 
given  to  Congress,  even  when  unexercised,  itself  forbade 
State  legislation. 

The  power  of  Congress  upon  this  subject,  the  Court 
said,  was  not  dormant,  and  it  was  not  necessary  to 
decide  whether  its  existence  excluded  all  action  by  the 
States,  although  the  Court  indicated  that  the  views  ex- 
pressed in  the  previous  case  had  not  changed. 

Congress  had  expressly  authorized  importation  by 
imposing  a  duty  upon  the  article  which  the  plaintiff  in 
error  had  sold.  The  right  to  import,  the  Court  said,  in- 
volved a  right  on  the  part  of  the  importer  to  sell,  and  any 
State  law  which  imposed  a  tax  upon  the  exercise  of  the 
right  must  be  in  collision  with  the  Federal  statute,  and, 
therefore,  invalid. 

"This  argument,"  Mr.  Justice  Daniel  said  in  the 
License  Cases,1  "involves  the  palpable  absurdity,  that 
merchandise  which  the  government  does  not  so  strongly 
favor  as  to  admit  without  duty  shall  remain  intact  and 
sacred,  whilst  merchandise  which  is  so  much  preferred 
as  to  be  admitted  freely  —  nay,  whose  introduction  is  in 
effect  invited  and  solicited  by  the  Federal  government  — 
may  be  burdened  by  the  States  at  pleasure." 

This  criticism  is  well  made  if  the  decision  be  under- 

1  5  How.  616. 


104  THE    FEDERAL  POWER   OVER 

stood  as  founded  upon  the  proposition  that  by  payment 
of  the  Federal  tax  the  importer  purchased  the  right  to 
sell  free  from  State  interference.  The  right  to  sell  can- 
not thus  be  purchased.1  The  argument  of  the  Court 
emphasized  the  fact  that  the  Federal  power  had  been 
exercised,  but  for  its  conclusion  rests  upon  the  implica- 
tion that  Federal  power  over  commerce  was  exclusive 
even  when  unexercised.  In  the  language  of  the  opinion, 
the  power  claimed  by  the  State  was  "in  its  nature  in  con- 
flict with  that  given  to  Congress,"  or,  as  stated  in  a  later 
decision,  the  case  held  that  "by  the  terms  of  the  Con- 
stitution, the  power  to  impose  duties  on  imports  was 
exclusive  in  Congress."  2 

Following  these  cases  in  1829  came  Willson  v.  Black- 
bird Creek  Marsh  Company.3 

This  case  involved  the  validity  of  a  law  of  Delaware, 
authorizing  the  erection  of  a  dam  across  Blackbird 
Creek,  a  small  stream  wholly  within  the  limits  of  that 
State.  It  was  admitted  that  Congress  had  not  legis- 
lated upon  the  subject,  and,  therefore,  it  seemed  at  first 
view  as  though  the  very  question  was  raised,  upon  which 
the  Court  had  expressed  so  definite  an  opinion,  but  which 
according  to  the  view  then  held  by  some  students,  it 
had  not  been  required  to  decide,  in  the  two  preceding 
cases.  If  the  action  of  the  State  of  Delaware  was  in- 
valid, it  was  so  because  the  dormant  power  possessed  by 
Congress  excluded  all  action  whatever  by  the  States. 

The  opinion,  which  was  rendered  by  Mr.  Chief  Justice 
Marshall,  is  short,  and  without  reference  to  the  opinions 

1  Pervear  v.  Commonwealth,  5  Wall.  475.  ■  Ibid.  p.  479. 

8  2  Pet.  245. 


CARRIERS  AND   CORPORATIONS  105 

which  he  had  delivered  in  the  previous  cases.    The 
Court  said:  — 

"If  Congress  had  passed  any  act  which  bore  upon  the  case; 
any  act  in  execution  of  the  power  to  regulate  commerce,  the  object 
of  which  was  to  control  State  legislation  over  those  small  navigable 
creeks  into  which  the  tide  flows,  and  which  abound  throughout  the 
lower  country  of  the  middle  and  southern  States ;  we  should  feel 
not  much  difficulty  in  saying  that  a  State  law  coming  in  conflict 
with  such  act  would  be  void.  But  Congress  has  passed  no  such 
act.  The  repugnancy  of  the  law  of  Delaware  to  the  Constitution 
is  placed  entirely  on  its  repugnancy  to  the  power  to  regulate  com- 
merce with  foreign  nations  and  among  the  several  States ;  a  power 
which  has  not  been  so  exercised  as  to  affect  the  question. 

"We  do  not  think  that  the  act  empowering  the  Blackbird 
Creek  Marsh  Company  to  place  a  dam  across  the  creek  can,  under 
all  the  circumstances  of  the  case,  be  considered  as  repugnant  to 
the  power  to  regulate  commerce  in  its  dormant  state,  or  as  being 
in  conflict  with  any  law  passed  on  the  subject." 

This  opinion  has  met  with  widely  varying  interpreta- 
tions, and  has  been  considered  inconsistent  with  the 
views  expressed  in  Gibbons  v.  Ogden  and  in  Brown  v. 
Maryland.1  The  position  which  Mr.  Chief  Justice 
Marshall  had  taken  in  the  previous  cases  was  that  the 
grant  to  Congress  of  the  power  to  regulate  commerce  is 
exclusive  because  the  power  is  itself  a  unit,  incapable  of 
division,  and  comprehends  all  foreign  commerce  and  all 
commerce  among  the  States;2  or,  as  stated  by  Mr.  Jus- 
tice Strong,  it  was  that  the  commercial  power  is  so 
exclusively  vested  in  Congress  that  no  part  of  it  can  be 
exercised  by  a  State.3    It  is  plain,  too,  that  the  law  of 

1  "Constitutional  Decisions  of  John  Marshall,"  by  Mr.  Joseph  P.  Cotton, 
Introduction,  xxxiv.  2  Gibbons  v.  Ogden,  9  Wheat.,  at  p.  194. 

3  Case  of  the  State  Freight  Tax,  15  Wall.  232,  279. 


106  THE  FEDERAL  POWER   OVER 

Delaware  upon  which  the  case  arose,  was  a  law  which 
Congress  might  have  passed  in  effectuation  of  its  general 
commercial  power;  for,  aside  from  the  opinion,  which 
seems  clear  upon  this  point,  we  have  the  statement  of 
Mr.  Justice  Thompson,  who  was  upon  the  bench  at  that 
time,  that  this  law  was  so  regarded.1 

On  the  other  hand,  it  is  improbable  that  the  Court 
could  have  intended  to  disapprove  the  argument  in  both 
of  the  earlier  cases  in  so  brief  a  manner  and  without  ex- 
press reference.  "  There  isTiot  a  man  living,  I  suppose," 
said  Mr.  Justice  Clifford  in  Gilman  v.  Philadelphia, 
"who  has  any  reason  to  conclude  that  the  constitutional 
views  of  the  Court  had  at  that  time  undergone  any 
change;"2  and  ample  confirmation  of  this  view  may  be 
found  in  Mr.  Justice  Story's  statement  that  Mr.  Chief 
Justice  Marshall  agreed  in  his  dissenting  opinion  in  the 
case  of  New  York  v.  Miln.3 

It  is  possible  by  reading  this  case  with  the  opinions 
in  the  two  previous  cases  and  in  the  light  of  subsequent 
history,  to  find  in  the  comparison  a  foreshadowing  of  the 
present  rule  that  the  Federal  power  is  exclusive  in  mat- 
ters of  general  interest,  while  in  local  matters  the  States 
may  legislate  until  their  action  is  superseded  by  Con- 
gress. 

It  is  probable,  however,  that  the  question  to  which  the 
attention  of  the  Court  was  directed  and  upon  which  Mr. 
Chief  Justice  Marshall  passed,  concerned  the  character 
of  Blackbird  Creek,  rather  than  the  nature  of  Federal 
power.     State    legislatures    have    always    determined 

1  New  York  v.  Miln,  n  Pet.,  at  p.  149.  2  3  Wall.,  at  p.  743. 

3  11  Pet.  161. 


CARRIERS  AND   CORPORATIONS  107 

whether  or  not  a  particular  stream  is  navigable  under 
the  State  law,1  while  Congress  determines  whether  or 
not  a  stream  is  navigable  under  Federal  law.2  Some 
streams  are  of  such  national  importance  that  even  Con- 
gress cannot  deprive  them  of  the  character  of  public 
interstate  highways.  In  cases  involving  waters  of  this 
class,  the  right  of  navigation  is  protected  by  the  Con- 
stitution. The  fact  that  a  body  of  water  may  be  more 
or  less  capable  of  supporting  navigation  does  not,  how- 
ever, place  it  entirely  beyond  State  authority.3  Between 
the  two  extremes  mentioned  there  is  a  very  large  class 

1  New  York :  An  Act  declaring  certain  streams  to  be  public  highways, 
Act  of  Aug.  10,  1798,  Laws  of  1 797-1800,  p.  296;  Act  of  April  17,  185 1, 
Laws  of  N.  Y.,  1851,  p.  421,  declaring  Moose  River  a  public  highway; 
Illinois:  An  Act  declaring  Cash  River  a  navigable  stream,  Feb.  24, 
1819,  Revised  Laws,  1819,  p.  69;  Big  Beaucoup  River,  id.  p.  73;  Sangamon 
River,  Act  of  Dec.  26,  1822,  Laws  of  1822-1823,  p.  81 ;  Big  Vermilion  River, 
Act  of  March  1,  1831,  Laws  of  1830-1831,  p.  127;  Embarrass  River  and 
Bon  Pass  Creek,  Jan.  7,  1831,  p.  126;  Big  Bay,  Act  of  Feb.  22,  1833,  Private 
Laws,  1833,  p.  128;  Big  Muddy,  Act  of  Jan.  31,  1835,  Laws  of  1834-1835, 
p.  56;  SpoonRiver,Actof  June  1, 1835,  Laws  of  1834-1835,  p.  143;  Crooked 
Creek,  Act  of  Jan.  1,  1835,  Laws  of  1834-1835,  p.  143;  Act  declaring  certain 
streams  navigable,  March  1,  1837,  Laws  of  1836-1837,  p.  167;  McKees 
Creek,  Act  of  March  1, 1837,  Laws  of  1836-1837,  p.  168;  Skillet  Fork,  Act  of 
March  4,  1837,  Laws  of  1836-1837;  p.  168;  Act  declaring  navigable  Mill 
and  Big  Creeks,  Feb.  16,  1839,  Laws  of  1838-1839,  p.  123;  Mauvaise-terre, 
Act  of  Feb.  16,  1839,  Laws  of  1838-1839,  p.  122;  Fox  River,  Act  of  Jan.  15, 
1840,  Public  Laws,  1839-1840,  p.  98;  the  Snycarty,  Act  of  March  4,  1843, 
Pub.  Laws  1842-1843,  p.  244.  The  Act  of  Alabama  of  Jan.  10,  1827,  for  im- 
provement of  Cahawba  River  provided  that  so  far  as  the  river  was  at  that 
time  navigable  it  should  not  be  obstructed  without  consent  of  Congress,  which 
subsequently  was  given.     See  Act  Cong.  May  24,  1828,  4  Stat.  308. 

2  Resolution  of  July  13,  1868,  15  Stat.  257;  Act  of  May  6,  1870,  16  Stat. 
121;  Act  of  March  23,  1900,  31  Stat.  50.  An  Act  declaring  Cuivre  River 
to  be  not  a  navigable  stream,  March  23,  1900,  31  Stat.  50.  An  Act  to  declare 
a  branch  of  the  Mississippi  River  opposite  the  City  of  La  Crosse  and  known 
as  West  Channel,  to  be  unnavigable,  Feb.  12,  1901,  31  Stat.  804.  An  Act 
defining  the  limit  of  navigation  of  the  Osage  River  in  the  State  of  Missouri, 
March  4,  1904,  33  Stat.  58.  An  Act  declaring  Grand  River,  Missouri,  to 
be  not  a  navigable  stream,  Feb.  19,  1905, 33  Stat.  715.  Act  of  Jan.  20,  1870, 
16  Stat.  61,  repeals  so  much  of  Act  of  Aug.  8,  1846,  as  declared  the  Des 
Moines  River  in  the  then  territory  of  Iowa,  a  public  highway. 

3  See  Congressman  Snyder's  "  Jeu  d'Esprit,"  Dec.  23,  1842,  Cong.  Globe, 
Vol.  XII,  d.  83. 


108  THE   FEDERAL  POWER  OVER 

of  cases  in  which  the  question  whether  a  particular 
water  constituted  an  interstate  highway  is  one  upon 
which  Congress  may  decide  as  a  legislative  question. 
In  the  absence  of  such  determination,  and  in  cases 
involving  waters  of  minor  importance,  the  courts 
may  well  refuse  to  act  in  advance  of  Federal  legisla- 
tion.1 

This,  apparently,  is  the  extent  of  the  ruling  in  Willson 
v.  Blackbird  Creek  Marsh  Company. 

The  influence  of  Slavery.  With  these  decisions,  the 
first  period  of  judicial  construction  of  the  commerce 
clause  comes  to  an  end.  Between  the  year  1829,  when 
the  Willson  case  was  decided,  and  the  year  1837,  when 
New  York  v.  Miln  was  decided,  the  slave  power  had 
become  the  dominant  political  influence. 

In  its  relation  to  constitutional  principles  the  great 
characteristic  of  the  slave  system  was  its  opposition  to 
free  labor,  —  that  is,  labor  directly  competing  with  but 
outside  the  control  of  the  system.  Generally  this  op- 
position was  of  a  local  nature,  involving  State  or  muni- 
cipal laws  alone,  but  sometimes,  when  the  effort  was 
made  to  exclude  free  laborers  from  other  States,  Federal 
questions  arose  involving  the  relation  of  the  States  to 
each  other  and  to  the  national  government. 

Had  slavery  been,  as  the  South  insisted,  a  purely 
domestic  institution  in  the  States  where  it  existed,  it 
could  not  have  entered  national  politics.  The  system 
depended,  however,  upon  exclusion  of  free  competition; 
that  is,  as  has  been  said,  the  necessity  which  required 

1  See  opinion  of  Mr.  Justice  McLean,  Passenger  Cases,  7  How.  398. 


CARRIERS  AND   CORPORATIONS 


109 


that  it  should  dominate  wherever  it  existed  made  it 
particularistic  and  exclusive.1  This  was  the  origin  of 
Calhoun's  theories  of  the  Constitution,  and  of  those 
influences  which  forced  the  system  of  arbitrary  control 
from  the  position  of  a  domestic  institution  into  the  broad 
field  of  national  politics.  By  the  Constitution,  Congress 
is  given  a  national  power  of  commercial  regulation.  Let 
such  a  power  once  be  established,  and  no  State  could 
exclude  its  operation.  By  the  Constitution,  citizens  of 
each  State  have  the  rights  and  privileges  of  citizens 
of  the  several  States,  and  wherever  this  was  recognized 
any  person  could  move  from  one  State  to  another  and 
freely  compete  there  for  labor.  But  the  exercise  of  this 
right  in  Southern  States  plainly  would  be  nothing  less 
than  the  substitution  of  competition  for  a  system  of  arbi- 
trary control.  For  this  reason  many  States  forbade  im- 
migration of  free  persons  of  color.  In  pursuance  of  this 
policy  South  Carolina,  in  1822,  passed  a  law  of  which  the 
third  section  enacted  "that  if  any  vessel  shall  come  into 
any  port  or  harbor  of  this  State  from  any  other  State 
or  foreign  port  having  on  board  any  free  negroes,  or  per- 
sons of  color  as  cooks,  stewards  or  mariners,  or  in  any 
other  employment  on  board  of  said  vessel,  such  free 
negroes  or  persons  of  color  shall  be  liable  to  be  seized 
and  confined  in  gaol,  until  such  vessel  shall  clear  out  and 
depart  from  this  State ;  and  that  when  such  vessel  is  ready 
to  sail,  the  captain  of  said  vessel  shall  be  bound  to  carry 
away  the  said  free  negro  or  free  person  of  color."  In 
many  ways  the  statute  bears  a  striking  resemblance  to  the 
law  of  Louisiana  which  the  United  States  Circuit  Court 

1  First  annual  message  of  President  Johnson. 


no  THE  FEDERAL   POWER   OVER 

declared  unconstitutional  in  1895/  and  which  provided 
"that  no  sailor  or  portion  of  the  crew  of  any  foreign  sea- 
going vessel  shall  engage  in  working  on  the  wharves  or 
levees  of  the  City  of  New  Orleans,  beyond  the  end  of  the 
vessel's  tackle." 

In  1823  the  validity  of  the  South  Carolina  law  was 
attacked  before  Mr.  Justice  Johnson  of  the  United 
States  Supreme  Court  sitting  on  circuit  in  Charleston. 
By  the  Federal  Constitution,  citizens  of  each  State  are 
entitled  to  the  privileges  and  immunities  of  citizens  of  the 
several  States,  and  among  the  rights  thus  secured  is 
"the  right  of  a  citizen  of  one  State  to  pass  through, 
or  to  reside  in  any  other  State,  for  the  purposes  of  trade, 
agriculture,  professional  pursuits,  or  otherwise."  2  This 
was  the  very  right  which  South  Carolina  denied. 

The  position  in  which  Mr.  Justice  Johnson  was  placed 
must  have  been  exceedingly  difficult.  The  question 
presented  was  one  which  commonly  awoke  excitement, 
he  was  alone  on  the  bench,  and  the  weight  of  public 
sentiment  in  the  community  where  he  sat  supported  the 
organized  system  of  the  South.  Like  other  judges  of 
the  Federal  circuit  and  district  courts,  and  like  most  of 
the  Federal  justices,  Mr.  Justice  Johnson  had  been  a 
resident  of  the  circuit  to  which  he  was  assigned.  He 
knew  the  tendencies  of  public  opinion,  and  was  so  situ- 
ated as  to  feel  their  force.  There  must  have  been  a 
strong  temptation  to  yield  to  all  these  influences.     Con- 

1  Cuban  S.S.  Co.  v.  Fitzpatrick,  66  Fed.  Rep.  63. 

2Corfield  v.  Coryell,  4  Wash.  C.  C.  Rep.  381.  Von  Hoist,  "Constitu- 
tional History  of  the  United  States,"  1846-1850,  p.  140,  n.  1.  Speech  of  John 
Bacon  of  Massachusetts  in  House  of  Representatives,  Feb.  7,  1803.  Annals 
7th  Cong.,  2d  Sess.,  467. 


CARRIERS  AND   CORPORATIONS  in 

gress  itself,  when  petitioned  by  Northern  sailors  for 
relief  against  this  law,  felt  the  pressure,  for  it  took  no 
action,  and,  as  Professor  Yon  Hoist  remarks,  "  either 
considered  the  matter  too  unimportant  to  bother  itself 
about,  or  else  considered  it  prudent  to  let  such  a  ticklish 
question  alone."  *  In  the  Federal  court,  no  room  was 
found  for  such  considerations.  It  was  under  these 
circumstances  that  there  was  rendered  the  first  of  that 
long  series  of  decisions  by  which  the  Federal  courts  have 
consistently  maintained  the  right  of  every  citizen  to 
follow  any  lawful  occupation  at  any  place  in  the  country. 
More  than  this,  Nullification  was  for  the  first  time  de- 
clared unconstitutional.  The  United  States  Constitu- 
tion, "the  most  wonderful  instrument  ever  drawn  by 
the  hand  of  man,"  said  Mr.  Justice  Johnson  in  lan- 
guage suggestive  of  the  famous  phrase  afterward  used 
by  Mr.  Gladstone,  created  a  paramount  government 
which  a  State  cannot  throw  off  at  its  own  will  and 
pleasure.2 

Notwithstanding  this  decision  and  the  decision  of  Gib- 
bons v.  Ogden  rendered  by  the  Supreme  Court  in  the 
year  following,  South  Carolina  continued  to  enforce  the 
unconstitutional  statute,  and  her  example  was  followed 
in  Louisiana  by  the  passage  of  a  similar  act,  while  at  the 
same  time  the  illegality  of  the  proceedings  was  tacitly 
recognized  when,  upon  the  protest  of  the  English  gov- 
ernment, an  exception  in  the  operation  of  the  statute  was 
made  in  favor  of  foreign  vessels.  The  freedom  thus 
given  to  foreigners,  however,  the  Federal  government 

1  "Constitutional  History  of  the  United  States,"  1846-1850,  p.  129. 

2  Elkison  v.  Deliesseline,  2  Wheel.  Cr.  Cas.  56. 


112  THE   FEDERAL  POWER  OVER 

was  unable  to  procure  for  its  own  citizens,  and  the 
matter  although  often  agitated  1  rested  until  1844,  when 
the  State  of  Massachusetts  sent  Samuel  Hoar  to  Charles- 
ton, and  Henry  Hubbard  to  New  Orleans,  there  as  its 
agents  to  take  such  legal  steps  as  might  be  necessary 
to  procure  the  discharge  of  citizens  of  Massachusetts 
imprisoned  under  these  laws. 

The  arrival  of  these  representatives  in  the  cities  to 
which  they  were  sent  created  great  excitement.  It  im- 
mediately became  apparent  that  the  labor  question  was 
not  to  be  treated  as  other  questions,  that  the  law  was 
not  to  be  applied  to  it  as  to  other  subjects,  but  that  its 
issues  were  to  be  determined  in  the  street  and  by  force. 
In  both  cases  the  mission  was  fruitless  and  the  effort  to 
appeal  to  the  courts  was  abandoned.  The  laws  directed 
against  free  labor,  solely  because  it  was  free,  remained 
upon  the  statute  books  of  Southern  States,  "  until  they 
were  swept  away  by  the  fire  and  blood  which  destroyed 
the  guilty  cause  itself."  2 

During  this  period  the  cases  of  New  York  v.  Miln,3 
the  License  Cases,4  and  the  Passenger  Cases 5  afforded 
occasion  for  the  argument  of  questions  which  very 
closely  concerned  the  underlying  issues  between  free 
and  slave  States. 

From  a  constitutional  point  of  view  these  questions 
were  extremely  difficult. 

1  Report  No.  80,  House  of  Representatives,  27th  Cong.,  3d  Sess.,  Jan.  20, 
1843;  Validity  of  South  Carolina  Police  Bill,  1  Op.  Atty.  Gen.  659;  2  id. 
426;  The  Cynosure,  1  Sprague  88;  The  William  Jarvis,  1  Sprague  485 ;  The 
Brig  Wilson,  1  Brock.  423. 

■  Henry  Wilson,  "Rise  and  Fall  of  the  Slave  Power,"  Vol.  1,  p.  585. 

3  11  Pet.  (1837)  102.  *  5  How.  (1847)  504. 

5  7  How.  (1848)  283. 


CARRIERS  AND   CORPORATIONS  113 

On  the  one  hand,  as  has  been  seen,  the  Constitution 
gave  the  citizens  of  each  State  the  privileges  and  im- 
munities of  citizens  in  the  several  States. 

On  the  other  hand,  the  Constitution  left  each  State 
to  determine  for  itself  what  immigration  should  be 
permitted.  On  Sept.  16,  1788,  the  Congress  of  the 
Confederation  "  recommended  to  the  several  States  to 
pass  proper  laws  for  preventing  the  transportation  of 
convicted  malefactors  from  foreign  countries  into  the 
United  States."  The  resolution,  moved  by  Mr.  Bald- 
win, seconded  by  Mr.  Williamson,  both  of  whom  had 
been  members  of  the  Constitutional  Convention,  was, 
said  Mr.  Justice  Thompson,1  a  strong  contemporaneous 
expression  of  the  opinion  of  Congress  that  under  the  new 
Constitution  the  power  to  control  immigration  from 
foreign  countries  lay  with  each  State.  As  illustrating 
the  difficulty  of  the  question,  it  is  noticeable,  however, 
that  the  fourteenth  article  of  the  English  treaty  of  1794, 
Jay's  treaty,  provided  that  British  subjects  might  freely 
come,  with  ships  and  cargoes,  etc.2 

So  far  as  concerned  communication  by  land  between 
the  States,  the  rule  was  clear.  "The  State  govern- 
ments," it  was  said,  "have  always  possessed  the  power 
of  stopping  or  taxing  passengers;  that  power  they  have 
never  given  up,"  3  and  Mr.  Justice  Thompson  urged  that 
passengers  by  sea  had  no  greater  rights  within  a  State 

1  New  York  v.  Miln,  11  Pet.  102,  149. 

3  For  a  discussion  of  this  provision  see  7  How.  451,  472,  506,  569. 

8  Annals  2d  Cong.,  303-309.  In  December,  1818,  it  was  proposed  to  Con- 
gress to  prohibit  the  migration  or  transportation  of  slaves  or  colored  servants 
from  one  State  to  another  in  violation  of  State  law.  This  was  defeated  on  the 
ground  that  the  subject  was  exclusively  within  State  jurisdiction.  Annals  15th 
Cong.,  2d  Sess.,  336. 


H4  THE   FEDERAL   POWER   OVER 

"than  if  they  had  come  by  land  from  an  adjoining 
State."  x 

The  provisions  of  the  Constitution  relating  to  the 
questions  at  issue  between  the  two  sections  of  the  country 
were  inconsistent  with  each  other,  the  subject  was  not 
covered  by  the  commerce  clause,  and  a  solution  could 
only  be  reached  taking  the  Constitution  as  a  whole,  by  a 
determination  of  the  character  of  the  government  which 
it  created  and  of  the  relations  under  it  of  the  States  to 
each  other.  These,  however,  were  the  questions  which 
it  required  civil  war  to  settle.  At  the  conclusion  of  that 
war,  the  Supreme  Court  affirmed  the  right  of  free  pas- 
sage from  State  to  State,  not  as  a  result  of  the  construc- 
tion of  any  clause  or  provision  of  the  Constitution,  but 
because  this  right  is  essential  to  the  existence  and  ad- 
ministration of  the  nation.2 

In  the  meantime,  so  far  as  the  cases  in  view  of  the  ex- 
treme dissension  on  the  bench  can  be  said  to  decide  any- 
thing, it  was  held  in  New  York  v.  Miln3  that  a  State  may 
require  the  master  of  a  vessel  to  report  his  passengers  to 
State  authorities;  in  the  License  Cases,4  that  a  State 
may  tax  the  sale  of  liquor  brought  from  another  State, 
etc. ;  and  in  the  Passenger  Cases,5  that  a  State  may  not 
tax  passengers  arriving  from  foreign  countries.  The 
fact  of  these  decisions  is,  however,  of  less  consequence 
than  the  arguments  which  were  used,  for  out  of  the  con- 
fusion which  was  inevitable  when  one  party  sought  to 
establish  complete  national  powers  for  a  government 
which  the  other  party  regarded  as  a  mere  league  of 

1  New  York  v.  Miln,  n  Pet.  102,  147.        3  n  Pet.  102. 
Crandall  v.  Nevada,  6  Wall.  35.  *  5  How.  504.       5  7  How.  283. 


CARRIERS  AND   CORPORATIONS  115 

States,  there  resulted  as  a  compromise  a  wider  power 
than  had  ever  before  received  judicial  sanction,  a  power 
which,  being  capable  of  expansion,  might  well  have  sat- 
isfied the  one  party,  while  being  adaptable  to  special  cir- 
cumstances in  each  case,  it  afforded  protection  to  the 
interests  of  the  South. 

This  solution,  which  Mr.  Webster  had  suggested  in 
his  argument  of  Gibbons  v.  Ogden,  was  taken  up  by 
Mr.  Justice  Woodbury  in  the  License  Cases,  and  again 
in  the  Passenger  Cases.  The  Federal  power  over  com- 
merce, he  said,  is  not  to  be  considered  as  a  whole,  but 
creates  a  jurisdiction  in  which  Federal  power  is  in  some 
respects  exclusive  and  in  other  respects  concurrent  with 
State  power. 

"When  I  say  much  was  left,  and  meant  to  be  left,  to  the  States 
in  connection  with  commerce,  I  mean  concerning  details  and  local 
matters,  inseparable  in  some  respects  from  foreign  commerce,  but 
not  belonging  to  its  exterior  or  general  character,  and  not  con- 
flicting with  anything  Congress  has  already  done.  ...  So  far 
as  reason  exists  to  make  the  exercise  of  the  commercial  power  ex- 
clusive, as  on  matters  of  exterior,  general  and  uniform  cognizance, 
the  construction  may  be  proper  to  render  it  exclusive,  but  no 
further,  as  the  exclusiveness  depends  in  this  case  wholly  on  the 
reasons,  and  not  on  any  express  prohibition,  and  hence  cannot 
extend  beyond  the  reasons  themselves.  Where  they  disappear 
the  exclusiveness  should  halt.  In  such  case,  emphatically,  ces- 
sante  ratione,  cess  at  et  ipsa  lex."  l 

The  fact  that  Congress  has  not  legislated,  he  said,  is 
prohibitory  of  State  action  only  where  the  subject  of 
legislation  is  itself  incapable  of  divided  control.     "In 

1  7  How.  559. 


Ii6  THE   FEDERAL  POWER   OVER 

other  cases,  when  the  power  of  Congress  is  not  exclu- 
sive and  that  of  the  States  is  concurrent,  the  silence  of 
Congress  to  legislate  on  any  mere  local  or  subordinate 
matter  within  the  limits  of  a  State,  though  connected  in 
some  respects  with  foreign  commerce,  is  rather  an  in- 
vitation for  the  States  to  legislate  upon  it."  x 

In  Cooley  v.  Port  Wardens,2  the  next  case  involving 
this  question,  the  distinction  made  by  Mr.  Justice  Wood- 
bury in  the  License  and  Passenger  Cases  was  adopted 
as  the  rule  of  decision.  In  delivering  the  opinion  of  the 
Court  Mr.  Justice  Curtis  said :  — 

"The  diversities  of  opinion,  therefore,  which  have  existed  on 
this  subject,  have  arisen  from  the  different  views  taken  of  the 
nature  of  this  power.  But  when  the  nature  of  a  power  like  this  is 
spoken  of,  when  it  is  said  that  the  nature  of  the  power  requires 
that  it  should  be  exercised  exclusively  by  Congress,  it  must  be  in- 
tended to  refer  to  the  subjects  of  that  power,  and  to  say  they  are 
of  such  a  nature  as  to  require  exclusive  legislation  by  Congress. 
Now,  the  power  to  regulate  commerce,  embraces  a  vast  field, 
containing  not  only  many,  but  exceedingly  various  subjects,  quite 
unlike  in  their  nature;  some  imperatively  demanding  a  single 
uniform  rule,  operating  equally  on  the  commerce  of  the  United 
States  in  every  port;  and  some,  like  the  subject  now  in  question, 
as  imperatively  demanding  that  diversity,  which  alone  can  meet 
the  local  necessities  of  navigation.  Either  absolutely  to  affirm,  or 
deny  that  the  nature  of  this  power  requires  exclusive  legislation 
by  Congress,  is  to  lose  sight  of  the  nature  of  the  subjects  of  this 
power,  and  to  assert  concerning  all  of  them,  what  is  really  applicable 
but  to  a  part." 

Subsequent  cases,  apparently  by  inadvertence,  have 
broadened    even    this    broad    rule.      Cooley    v.  Port 

1  7  How.  559.  2 12  How.  310,  319. 


CARRIERS  AND   CORPORATIONS  117 

Wardens  held  that  the  Federal  power  was  exclusive  in 
cases  "which  admit  only  of  one  uniform  system"  of 
regulation.  In  the  case  of  the  State  Freight  Tax,  Mr. 
Justice  Strong,  referring  to  this  case,  said  the  rule  had 
been  announced  with  great  clearness  "that  whenever 
the  subjects  over  which  a  power  to  regulate  commerce  is 
asserted  are  in  their  nature  national,  or  admit  of  one  uni- 
form system  or  plan  of  regulation,  they  may  justly  be 
said  to  be  of  such  a  nature  as  to  require  exclusive  regu- 
lation by  Congress."  x  The  rule  as  thus  stated  is 
broader  than  the  argument  by  which  it  was  established, 
but  in  this  form  it  has  been  quoted  and  followed  in 
many  cases.2 

Final  Statement  of  the  Rule  as  to  Exclusiveness.     The 

distinction  thus  advocated  by  Mr.  Webster,  approved 
by  Mr.  Justice  Woodbury,  and  authoritatively  adopted 
by  the  Court  in  the  opinion  of  Mr.  Justice  Curtis,  has 
now  in  this  broadened  form  become  the  well- settled  rule 
of  the  Federal  courts.  The  States  may  establish  port 
regulations,  regulations  of  pilotage,  may  improve  their 
harbors  and  rivers,  erect  bridges  and  dams,  and  exercise 
many  other  local  powers.  In  the  exercise  of  its  proper 
authority,  a  State  may  enact  laws  providing  for  the  in- 
spection of  goods,  to  determine  whether  they  are  fit  for 
commerce,  and  to  protect  the  citizens  and  the  market 
from  fraud.  But  in  all  such  cases,  as  was  said  in  Leisy 
v.  Hardin,  though  the  States  may  exercise  powers  which 
may  be  said  to  partake  of  the  nature  of  the  power 

1  15  Wall.  232,  280. 

2  See  Welton  v.  Missouri,  91  U.  S.  275,  280;    Henderson  v.  Mayor  of 
N.  Y.,  92  U.  S.  259,  272;  Mobile  v.  Kimball,  102  U.  S.  691,  701. 


n8  THE  FEDERAL  POWER   OVER 

granted  to  the  general  government,  they  are  strictly  not 
such,  but  are  merely  local  powers,  which  have  full  oper- 
ation until  circumscribed  by  the  action  of  Congress  in 
effectuation  of  the  general  power. 

In  matters  admitting  uniform  regulation  through- 
out the  country  and  affecting  all  the  States,  the  inac- 
tion of  Congress  is  to  be  taken  as  a  declaration  of 
its  will  that  commerce  shall  be  "free  and  unrestricted'' 
so  far  only  as  concerns  any  general  regulation  by  the 
States. 

On  the  other  hand,  in  matters  of  local  nature,  such  as 
are  auxiliary  to  commerce  rather  than  a  part  of  it,  the 
inaction  of  Congress  is  to  be  taken  as  an  indication  that 
for  the  time  being,  and  until  it  sees  fit  to  act,  they  may  be 
regulated  by  State  authority. 

Since  the  decision  of  Cooley  v.  Port  Wardens,  the  rule 
therein  laid  down  has  been  followed  in  every  case  in  the 
Supreme  Court  upon  this  subject.  It  is  perhaps  the 
most  satisfactory  solution  which  has  ever  been  given 
of  this  vexed  question,1  and  "may  be  considered  as 
expressing  the  final  judgment  of  the  Court. 


jy  2 


1  Crandall  v.  Nevada,  6  Wall.  35,  42. 

2  Mobile  v.  Kimball,  102  U.  S.  691,  702;  Bowman  v.  R.  R.  Co.,  125 
U.  S.  465,  507;  Atlantic  &  Pacific  Co.  v.  Phila.,  190  U.  S.  160;  Bridge 
Co.  v.  Kentucky,  154  U.  S.  204;  Leisy  v.  Hardin,  135  U.  S.  100;  Stouten- 
burgh  v.  Hennick,  129  U.  S.  141 ;  Telegraph  Co.  v.  Pendleton,  122  U.  S.347; 
Steamship  Co.  v.  Pennsylvania,  122  U.  S.  326;  Ouachita  Packet  Co.  v.  Aiken, 
121  U.  S.  444;  Robbins  v.  Taxing  District,  120  U.  S.  489;  Wabash,  etc. 
R.  R.  Co.  v.  Illinois,  118  U.  S.  557;  Walling  v.  Michigan,  116  U.  S.  446, 
455;  Brown  v.  Houston,  114  U.  S.  622;  Gloucester  Ferry  Co.  v.  Pennsyl- 
vania, 114  U.  S.  196;  Cardwell  v.  Bridge  Co.,  113  U.  S.  205,  210;  Trans- 
portation Co.  v.  Parkersburgh,  107  U.  S.  691,  701,  702;  Escanaba  Co.  v. 
Chicago,  107  U.  S.  678,  687;  Packet  Co.  v.  Catlettsburg,  105  U.  S.  559; 
Tiernan  v.  Rinker,  102  U.  S.  123;  Hall  v.  DeCuir,  95  U.  S.  485;  R.  R. 
Go.  v.  Husen,  95  U.  S.  465;  Pound  v.  Turck,  95  U.  S.  459;  Foster  v.  The 
Master,  etc.,  of  the  Port,  94  U.  S.  246;  Henderson  v.  Mayor,  etc.,  92  U.  S. 
259,  272;  Welton  v.  Missouri,  91  U.  S.  275;   Case  of  State  Freight  Tax,  15 


CARRIERS  AND   CORPORATIONS  119 

This  rule  has,  however,  brought  its  own  difficulties. 
Not  only  is  the  decision  a  departure  from  the  intention 
of  the  Constitution,  but  it  is  also  a  departure  from  legal 
principles. 

The  question  whether  or  not  a  given  subject  admits 
of  but  one  uniform  system  of  regulation,  is  a  legislative 
question,  except  in  cases,  like  Gibbons  v.  Ogden,  for  in- 
stance, so  clear  that  the  legislature  cannot  legitimately 
supersede  the  judicial  determination.  The  rule  in 
Cooley  v.  Port  Wardens  is  not,  however,  so  restricted, 
but  holds  that  in  all  matters  which  demand  a  single  uni- 
form rule,  —  or  as  the  doctrine  is  broadened  by  later 
cases,  in  all  matters  which  admit  of  a  single  uniform 
rule,  —  the  silence  of  Congress  is  equivalent  to  a  decla- 
ration that  commerce  shall  be  free.  Upon  this  subject 
Professor  Thayer  remarks  that  — 

"If  it  be  said  .  .  .  that  the  courts  have  merely  been  construing 
the  silence  and  non-action  of  Congress,  as  being  a  declaration 
that  no  rule  is  required,  and  enforcing  that,  we  do  not  really  escape 
from  the  difficulty  just  mentioned.  As  regards  State  regulations 
of  commerce  in  matters  which  do  not  require  uniformity  of  rule, 
it  is  admitted  that  the  silence  of  Congress  is  not  conclusive  against 
them;  some  positive  intervention  of  Congress  is  required.  If, 
then,  the  courts  would  know  in  any  given  case  of  a  regulation  of 
commerce  what  the  silence  of  Congress  means,  how  are  they  to 
tell  unless  they  first  determine  under  which  head  the  given  regula- 
tion belongs,  that  of  regulations  requiring  a  uniform  rule,  or  of 
those  which  do  not?  ...  It  may  then  be  conjectured  that  the 
decisions  of  the  Federal  courts  are  likely  to  incline  as  time  goes  on, 

Wall.  232,  279;  Ward  v.  Maryland,  12  Wall.  418;  Hardy  v.  R.  R.  Co.,  32 
Kan.  698;  Master,  etc.,  of  Port  of  New  Orleans  v.  Ship  "M.  J.  Ward," 
14  La.  Ann.  287;  Commonwealth  v.  Huntley,  156  Mass.  236;  Lumberville, 
etc.,  Co.  v.  State  Board,  55  N.  J.  L.  529. 


120  THE  FEDERAL  POWER   OVER 

to  the  side  of  leaving  it  to  Congress  to  check  such  legislation  of  the 
States  as  may  be  challenged  on  the  ground  now  in  question,  and 
of  limiting  its  own  action,  in  respect  to  such  cases,  to  that  class  of 
State  enactments  which  is  so  clearly  unconstitutional  that  no  con- 
sent of  Congress  could  help  the  matter  out."  * 

In  other  words,  the  effort  which  the  Court  made  in 
Cooley  v.  Port  Wardens  to  find  a  field  in  which  Mr. 
Chief  Justice  Marshall's  decision  could  literally  be  ap- 
plied, involves  in  Professor  Thayer's  opinion  logical 
difficulties  from  which  in  time  the  Court  will  incline  to 
retreat. 

The  important  consideration  which  the  decision  in 
Cooley  v.  Port  Wardens  presents,  is  not,  however,  in  the 
question  whether  its  rule  will  prove  to  be  "the  final 
judgment  of  the  Court"  but  in  the  opportunity  which  it 
offered  for  development  of  the  Federal  power. 

1  Cases  on  Const.  Law,  2190-2191. 


CARRIERS  AND  CORPORATIONS  121 


CHAPTER     V 

EXTENSION   OF   FEDERAL   POWER   OVER   CARRIERS 

The  most  conspicuous  instance  of  this  development 
is  found  in  the  newly  acquired  jurisdiction  over  inter- 
state transportation. 

As  originally  formed,  the  Constitution  gave  Congress 
power  to  regulate  foreign  commerce  and  the  coasting 
trade.  These  two  branches  of  commerce  are  often  men- 
tioned as  though  separate.  In  fact,  however,  the  control 
of  foreign  commerce  to  be  effective  involves  control  of 
the  coasting  trade,  for  American  vessels,  whatever  their 
destination,  while  upon  the  high  seas  are  engaged  in 
navigation  with  the  ships  of  other  nations  thus  of  neces- 
sity within  national  jurisdiction,1  while  foreign  vessels 
passing  from  one  American  port  to  another  in  order  to 
complete  delivery  of  their  cargoes  engage  to  this  extent 
in  coasting  trade.  It  was  entirely  appropriate,  there- 
fore, that  in  drafting  the  clause  which  gave  to  Congress 
power  to  regulate  this  subject,  terms  should  be  employed 
which  referred  distinctively  to  foreign  intercourse.2    To 

1  Lord  v.  Steamship  Co.,  102  U.  S.  541. 

2  That  the  word  "  commerce  "  was  characteristic  of  trade  with  foreign  na- 
tions appears  in  the  law  dictionaries  used  when  the  Constitution  was  formed. 
Thus  Giles  Jacobs  says:  "There  is  a  distinction  between  commerce  and 
trade ;  the  former  relates  to  our  dealings  with  foreign  nations,  or  our  colo- 
nies abroad,  the  other  to  our  mutual  traffic  and  dealings  among  ourselves  at 
home.  ..."  Burrill  also  says:  "A  distinction  is  frequently  made  be- 
tween commerce  and  trade  properly  so  called,  the  latter,  intercourse  between 


122  THE  FEDERAL   POWER   OVER 

go  further  than  this,  and  to  hold,  as  some  have  argued, 
that  Congress  was  given  no  independent  power  to  regu- 
late interstate  commerce,  but  that  the  clause  should  be 
read  as  conferring  power  of  regulation  only  over  com- 
merce which  being  conducted  with  foreign  nations  ex- 
tends among  the  several  States,1  is  probably  incorrect. 
Congress  was  given  one  single  power  of  regulation  which 
to  varying  extent  might  be  exercised  over  three  subjects 
—  foreign,  interstate,  and  Indian  commerce.  The  power 
was,  however,  of  external,  not  of  internal  regulation,  and 
did  not  touch  communication  conducted  among  the 
States  by  highways  or  ferries  —  or  by  any  means  other 
than  coastwise  navigation. 

citizens  and  subjects  of  the  same  nation,  and  the  former  seems  almost  ex 
vi  termini  to  import  intercourse  by  means  of  shipping  to  be  used  as  the  syno- 
nym of  maritime. " 

Beawes,  "Lex  Mercatoria,"  p.  i,  thus  defines  the  word:  "Commerce  is 
that  intercourse  with  foreign  nations,  which  is  carried  on  from  one  country 
to  another  by  means  of  navigation,  either  for  the  exchange  of  commodities, 
or  for  the  sale  or  purchase  of  them,  through  the  medium  of  money.  Com- 
merce then  has  its  basis  in  navigation,  and  is  supported  by  exports  and  im- 
ports, whereas  simple  trade  may  be  transacted  independent  of  these  elements 
and  commerce.  And  herein  chiefly  consists  the  difference."  See  speech 
of  J.  W.  Singleton,  infra. 

1  "If  the  Constitution  had  simply  given  to  Congress  the  power  to  'regu- 
late commerce  with  foreign  nations'  and  then  stopped,  omitting  the  words 
'and  among  the  States,'  the  question  would  naturally  arise,  what  commerce? 
It  could  not  regulate  the  commerce  between  two  foreign  nations.  Then 
what  commerce  is  to  be  regulated  ?  The  answer  is  found  by  adding  to  the 
words  of  the  supposed  grant,  the  words  of  the  grant  itself.  .  .  .  The  com- 
merce subject  to  its  regulations  must  have  its  inception  in  a  foreign  nation. 
The  voyage  that  brings  the  material  to  be  converted,  sold,  or  exchanged  on 
our  shores  must  begin  in  a  foreign  country  and  end  among  the  States,  or 
vice  versa."  Speech  of  J.  W.  Singleton  of  Illinois,  Feb.  4,  188 1,  46th  Cong., 
3d  Sess.,  Cong.  Rec,  Vol.  11,  Part  III,  Appendix  pp.  74-81.  Pinckney's 
motion  in  the  Convention,  Aug.  29,  1787,  "that  no  act  of  the  legislature  for 
the  purpose  of  regulating  the  commerce  of  the  United  States,  with  foreign 
powers,  among  the  United  States,  shall  be  passed  without  the  assent  of  two- 
thirds,"  etc.,  is  so  worded  as  to  suggest  that  the  limitation  referred  only  to 
commerce  of  this  character.  Both  Pinckney  and  Paterson,  however,  had 
advocated  a  grant  to  Congress  of  power  to  regulate  commerce  of  the  States 
"as  well  with  foreign  nations  as  with  each  other,"  and  thiswas  probably 
the  meaning  of  the  phrase  reported  by  the  Committee  of  Detail  on  August  6. 


CARRIERS  AND   CORPORATIONS  123 

On  the  other  hand,  so  far  as  concerned  that  commerce 
which  fell  within  Federal  control,  the  power  of  Congress 
was  not  restricted  to  the  control  of  navigation  which 
crossed  State  lines,  but  included  all  coastwise  and  for- 
eign navigation.  Federal  statutes  requiring  the  enroll- 
ing and  licensing  of  vessels  engaged  in  the  coasting 
trade  have,  from  the  earliest  days,  applied  to  all  vessels 
so  engaged,  though  employed  in  navigation  between 
ports  in  the  same  State.  The  Federal  power  over  this 
subject,  said  Haines,  in  arguing  the  case  of  Steamboat 
Co.  v.  Livingston,1  is  "an  entirety,"  extending  wherever 
coastwise  and  foreign  navigation  extends.  That  the 
Federal  power  was  limited  to  control  of  navigation  be- 
ginning in  one  State  and  ending  in  another,  was,  he 
said,  a  novel  construction  owing  its  origin  to  the  steam- 
boat controversy,  not  intended  in  1787  and  not  to  be 
followed  when  that  great  controversy  should  be  ended. 

Over  this  commerce  Federal  power  extended,  as  has 
been  shown,  so  far  as  to  enable  Congress  to  control  for- 
eign relations,  to  tax  foreign  commerce,  to  exclude  for- 
eign vessels  from  the  coasting  trade,  and  to  protect  com- 
merce among  the  States  from  restrictions  forbidden  by 
the  Constitution.2 

To  this  extent,  then,  Federal  power  over  navigation 
imported  a  limited  jurisdiction  over  carriers.  The 
duties  which  the  carrier  owed  to  the  public  were,  how- 
ever, even  in  the  case  of  transportation  extending  across 

1  1  Hopk.  Ch.  149,  159. 

2  Message  to  Congress,  May  4,  1822;  speech  of  William  H.  Crawford 
in  Senate,  Feb.  11,  1811;  Annals  nth  Cong.,  3d  Sess.,  pi.  139;  see  also 
speech  of  William  Drayton  of  South  Carolina  in  House  of  Representatives, 
Feb.  26,  1828,  Cong.  Deb.,  Vol.  IV,  Part  II,  pi.  1635-1636. 


124  THE   FEDERAL   POWER  OVER 

State  lines,  derived  from  the  State,  not  from  the  United 
States,  and  were  unaffected  by  this  new  jurisdiction. 
The  right  to  engage  in  interstate  commerce,  together 
with  the  correlative  duty  of  the  carrier  to  receive,  carry, 
and  deliver,  originates,  as  already  shown,  in  State  law. 
This  subject,  both  by  reason  of  its  importance  and  of 
the  uncertainty  which  appears  in  many  of  the  decisions, 
requires  consideration. 

By  English  law  a  common  carrier  was  under  an  im- 
posed duty  to  receive,  carry,  and  deliver,  and  while  goods 
were  in  his  possession  to  answer  for  them  as  insurer  save 
as  against  two  perils,  —  acts  of  God  and  of  public  en- 
emies. The  obligation  which  is  thus  stated  in  double 
form  was  in  fact  a  single  duty,  —  that  to  carry  safely, 
—  the  power  which  imposed  the  duty  measuring  also 
the  extent  of  the  liability  thus  created. 

As  early  as  the  reign  of  Charles  II  it  was  held  that  the 
liability  of  an  insurer  rested  upon  a  carrier  engaged  in 
foreign  commerce,1  and  though  in  this  case  the  loss 
occurred  in  England,  nevertheless  the  liability  was  re- 
garded as  attaching  to  the  carrier  so  long  as  he  had 
charge  of  the  goods;  —  the  duty  was  not  restricted  to 
the  territory  of  the  sovereign  which  imposed  it.2  In 
this  country  many  cases  of  the  same  character  exist 
and  the  rule  appears  to  be  well  settled.3 

In  most  instances,  however,  the  cases  concern  the 
carrier's  liability  after  acceptance  of  the  goods,  and 
although  the  power  of  the  sovereign  which  imposed  this 

1  Mors  v.  Slue,  T.  Raym.  220. 

2  Nugent  v.  Smith,  1  Com.  PL  Div.  19,  23;  Elliott  v.  Rossell,  10  Johns.  1. 

3  See  review  of  early  decisions  by  Chancellor  Kent  in  case  last  cited. 


CARRIERS  AND   CORPORATIONS  125 

liability  must  have  extended  also  to  impose  the  duty  of 
acceptance,  nevertheless  there  was  no  express  decision 
upon  this  point,  so  far  as  concerned  transportation 
beyond  the  realm  of  England,  until  the  case  of  Crouch  v. 
London  &  Northwestern  Railway1  in  1854.  This  was 
an  action  to  recover  damages  caused  by  defendant's 
refusal  to  accept  goods  as  a  common  carrier,  for 
transportation  from  London  to  Glasgow.  On  the  part 
of  the  railway  company,  it  was  urged  that  the  duty  of 
carriage  did  not  extend  beyond  the  realm  by  whose  law 
it  was  imposed.    Upon  this  subject  Jervis,  C.  J.,  said :  — 

"It  is  not  denied,  —  although  the  authorities  on  the  subject  are 
neither  numerous  or  satisfactory,  —  that,  if  a  man  holds  himself 
out  as  a  common  carrier  between  two  places  which  are  within  the 
realm,  he  is  bound  to  carry  all  goods  (within  reasonable  limits) 
that  may  be  tendered  to  him  to  be  carried  between  those  places. 
The  only  question  that  arises  upon  this  part  of  the  case,  is,  whether 
that  rule  applies  where  one  of  the  termini  is  a  place  out  of  England. 
I  am  of  opinion  that  it  does.  Where  a  party  who  holds  himself 
out  as  a  common  carrier  accepts  goods,  the  common  law,  —  that 
is  the  law  founded  upon  the  custom  of  the  realm,  —  engrafts  upon 
such  acceptance  a  contract  to  carry  safely  and  to  insure,  subject 
only  to  two  exceptions,  viz.,  the  act  of  God  and  the  Queen's  ene- 
mies. It  was  admitted  in  the  course  of  the  argument,  and  indeed 
it  could  not  be  denied,  that,  if  the  defendants  had  accepted  the 
goods  in  London,  the  common  law  obligation  to  carry  them  to 
Glasgow  would  have  attached.  The  case  of  Morse  v.  Slue,  1 
Ventr.  190,  T.  Raym.  220,  1  Mod.  85,  2  Keble  866,  3  Keble  75, 
112,  135,  2  Levinz  69,  is  admitted  to  be  an  authority  to  that 
extent :  and  Molloy's  commentary  on  that  case 2  puts  the  matter 
beyond  doubt.  If,  then,  it  is  admitted,  that,  when  once  the  de- 
fendants have  held  themselves  out  to  be  common  carriers,  there  is 

1  14  C.  B.  255.  2  De  Jure  Maritime  Book  II,  Ch.  2,  Sec.  II. 


126  THE   FEDERAL   POWER   OVER 

engrafted  upon  their  acceptance  of  the  goods  to  be  carried  a  com- 
mon law  liability  to  carry  to  all  places  to  which  they  profess  to  carry, 
even  if  one  of  those  places  should  be  beyond  the  confines  of  the 
realm,  it  would  seem  that  they  must  equally  take  upon  themselves 
the  other  part  of  the  common  law  liability  of  carriers,  viz.,  an 
obligation  to  accept  all  goods  which  reasonably  are  offered  to  them 
for  conveyance  to  and  from  the  places  to  which  they  profess  to 
carry,  whether  one  of  those  places  be  without  the  realm  or  not." 

In  this  opinion  Cresswell,  J.,  concurred,  saying:  — 

"It  is  said  that  they  (the  defendant  company)  cannot  be  com- 
mon carriers  from  London  to  Glasgow,  because  a  portion  of  the 
latter  journey  is  beyond  the  confines  of  England.  I  apprehend, 
however,  it  is  clear  that  the  defendants  may  be  common  carriers  out 
of  the  realm  as  well  as  within  it.  A  common  carrier  is  one  who, 
in  the  language  of  Lord  Holt,  in  Coggs  v.  Bernard,  2  Lord  Raym. 
909,  exercises  a  public  employment;  and  the  law  charges  him  'to 
carry  goods,  against  all  events,  but  acts  of  God  and  of  the  enemies 
of  the  King.'  Morse  v.  Slue  is  a  direct  authority,  that,  though 
the  contract  be  to  carry  to  a  place  out  of  the  kingdom,  the  liability 
of  the  common  carrier  attaches  to  them  as  to  one  incident,  viz.,  the 
obligation  safely  to  carry  and  deliver;  and,  if  so,  I  cannot  see  why 
the  other  incident,  viz.,  the  obligation  to  accept  goods  for  convey- 
ance, where  offered  in  a  reasonable  time,  and  under  reasonable 
circumstances,  should  not  also  attach." 

By  common  law,  therefore,  the  carrier's  duty  to  re- 
ceive, carry,  and  deliver  arose  from  the  law  of  the  State 
where  the  transportation  originated  and  followed  the 
carrier  through  other  jurisdictions  until  performance 
was  complete. 

It  has  been  suggested  that  the  carrier's  obligation 
arises  not  from  State  law,  but  from  contract;  that  the 
law  of  the  State  imposes  a  duty  to  accept  for  carriage  to 
any  point  upon  the  carriers'  line,  whether  within  the 


CARRIERS  AND   CORPORATIONS  127 

State  or  beyond  its  boundary,  and  that  when  accepted 
the  carriers'  rights  are  dependent  upon  the  contract. 
This  apparently  was  the  opinion  of  Jervis,  C.  J.,  and 
Cresswell,  J.,  in  the  case  of  Crouch  v.  London  &  North- 
western Railway.  The  view  was  followed  in  Nugent  v. 
Smith.1  This  theory  explains  nothing.  It  needs  no  de- 
cision to  establish  that  "  persons  may  voluntarily  con- 
tract to  do  what  no  legislature  would  have  the  right  to 
compel  them  to  do,"  2  but  the  question  upon  which  these 
cases  pass  concerns  solely  the  State  authority  to  compel. 
If  the  States  are  without  jurisdiction  to  impose  the  ob- 
ligation of  carriage  beyond  their  borders,  the  jurisdiction 
cannot  be  acquired  by  calling  the  obligation  a  contract 
rather  than  a  duty. 

Furthermore,  as  the  theory  is  stated,  the  carrier  is 
under  no  obligation  to  make  any  contract  save  that 
which  is  imposed  by  law,  and  the  obligation  thus  arising 
exists  without  his  assent.  Clearly  this  is  the  statement, 
not  of  a  contractual,  but  of  a  legal  duty,  and  so  it  is  held. 

"To  impose  upon  the  carrier  the  duty  of  receiving 
and  carrying,  .  .  .  requires  no  contract."  3 

The  duty  which  rests  upon  interstate  carriers  is  the 
same  in  character  as  that  which  rests  upon  all  other  car- 
riers. It  is  "  founded  on  the  custom  of  the  realm  at  com- 
mon law  and  is  independent  of  contract,  being  imposed 
by  law  for  the  protection  of  the  owner  and  founded  upon 
public  policy  and  commercial  necessity."  4 

1  1  Com.  PL  Div.  19-23. 

2  Lake  Shore,  etc.,  R.  Co.  v.  Smith,  173  U.  S.  684,  697. 

3  Inman  v.  St.  Louis,  etc.,  Co.,  14  Texas  Civ.  Ap.  49;  37  S.W.  Rep.  37-41. 

4  Chitty  on  Carriers,  34,  35 ;  Packard  v.  Taylor,  35  Ark.  402 ;  Clyde  S.  S. 
Co.  v.  Burrows,  36  Fla.  121,  122. 


128  THE   FEDERAL  POWER   OVER 

This  duty  arises  when  goods  are  tendered  for  trans- 
portation and  before  any  actual  contract  is  made.1 

The  result  of  these  authorities  appears  to  be  that  the 
duty  of  an  interstate  carrier  to  receive,  carry,  and  deliver 
goods  is  derived  from  the  law  of  the  State  from  which 
the  goods  are  sent ;  that  this  duty  is  indivisible  by  State 
lines  and  follows  the  goods  from  origin  to  destination. 

Foreign  States  may  restrict  this  duty  even  to  the  point 
of  forbidding  entrance,  but  in  the  absence  of  such  laws, 
and  so  far  as  concerned  English  law,  the  carrier  re- 
mained subject  to  his  initial  duty  until  delivery  of  the 
goods.  This  rule  prevailed  here  before  the  adoption  of 
the  Constitution.  The  conduct  of  commerce  was,  how- 
ever, under  the  conditions  of  that  time,  much  embar- 
rassed by  conflicting  and  discriminating  State  legisla- 
tion, and  to  avoid  impediments,  which  concerned  not  the 
existence  but  the  exercise  of  the  right,  Congress  was  em- 
powered to  regulate  interstate  commerce.  Without 
such  provision  it  was  anticipated  that, 

"Each  State,  or  separate  confederacy,  would  pursue  a  system 
of  commercial  policy  peculiar  to  itself.  This  would  occasion  dis- 
tinctions, preferences,  and  exclusions  which  would  beget  discon- 
tent. The  habits  of  intercourse,  on  the  basis  of  equal  privileges, 
to  which  we  have  been  accustomed  from  the  earliest  settlement 
of  the  country,  would  give  a  keener  edge  to  these  causes  of  dis- 
content than  they  would  naturally  have,  independent  of  this  cir- 
cumstance.' ' 2 

All  this  it  was  intended  by  the  Constitution  to  pre- 
vent,3 and  what  the  States  are  thus  forbidden  to  do  is 

1  Bluthenthal  v.  Railway,  84  Fed.  920.  2  Federalist,  No.  7. 

3  R.  R.  Co.  v.  Richmond,  19  Wall.  584. 


CARRIERS  AND   CORPORATIONS  129 

equally  forbidden  to  individuals.1  It  was  not  expected 
that  Congress  might  or  could  itself  restrict  the  free  inter- 
course which  had  so  long  existed,  for  the  purpose  of  the 
grant  was  to  establish  "  unrestrained  intercourse  between 
the  States."  2 

The  intention  of  the  makers  of  the  Constitution  then, 
was  to  preserve  existing  rights,  freeing  their  exercise 
from  interference,  and  the  history  of  the  commercial 
regulations  by  Congress,  and  by  the  States,  shows  that 
no  change  in  origin  of  fundamental  rights  was  intended.3 

This  was  the  meaning  of  the  grant  of  power  to  regu- 
late commerce  with  foreign  nations  and  among  the 
States. 

Besides  the  limitations  which  result  from  the  nature  of 
Federal  jurisdiction  over  both  foreign  and  interstate 
carriers,  it  must  be  observed,  too,  that  Federal  power 
over  foreign  commerce  is  much  broader  than  the  power 
over  commerce  among  the  States. 

The  distinction  has  been  recognized  in  the  administra- 

1  In  re  Debs,  158  U.  S.  564;  Addyston  Pipe  &  Steel  Co.  v.  United  States, 
175  U.  S.  211. 

2  Federalist,  No.  11. 

3  "Will  any  one  claim  that  we  have  authority  to  create  a  steamship  cor- 
poration to  trade  between  New  York  and  Philadelphia,  or  any  other  port, 
at  home  or  abroad,  subject  to  certain  rates  of  fare  and  freight?"  Speech  of 
Bird  of  New  Jersey  in  House  of  Representatives,  March  12,  1870,  Cong. 
Globe,  41st  Cong.,  2d  Sess.,  Part  III,  p.  1908. 

"I  think  that  no  one  can  read  the  history  of  those  times  without  becom- 
ing satisfied  that  the  framers  of  the  Constitution  had  in  mind  when  they 
granted  to  Congress  the  power  'to  regulate  commerce  between  the  several 
States'  a  very  different  thing  from  the  regulation  of  common  carriers." 
Senator  Byron  M.  Cutcheon  of  Michigan,  Dec.  16,  1884.  Cong.  Rec,  48th 
Cong.,  2d  Sess.,  Vol.  16,  Part  III,  Appendix,  p.  47. 

"What  right  has  Congress  to  regulate  common  carriers,  shippers,  and 
warehousemen  beyond  that  which  is  necessary'  to  prevent  a  State  from  ob- 
structing that  commerce  which  comes  across  her  borders?"  Oates  of  Ala- 
bama in  House  of  Representatives,  Jan.  20,  1887,  Cong.  Rec,  Vol.  18, 
Part  I,  p.  847. 


130 


THE   FEDERAL  POWER   OVER 


tion  of  government  from  the  very  beginning.  It  has 
been  understood  that  to  make  its  exclusions  effective 
Congress  could  forbid  or  permit  foreign  commerce  and 
license  the  coasting  trade,  but  that  with  these  exceptions, 
transportation  across  State  lines  was  conducted  under 
State  laws,  and  was  an  operation  which  the  Federal  gov- 
ernment could  neither  permit  nor  forbid.  In  1852, 
when  it  was  sought  to  extend  the  coasting  laws  to  ferry- 
boats operating  across  the  Mississippi  River  between 
Missouri  and  Illinois,  the  court  said :  — 

"A  license  from  the  United  States  and  a  license  from  a  State 
cannot  both  be  necessary  to  do  the  same  thing.  ...  A  license 
conveys  the  right  to  do  the  thing  or  it  conveys  no  right ;  if  it  conveys 
the  right  to  do  the  thing,  then  no  other  or  further  conveyance  from 
any  person  can  be  necessary.  A  license  from  the  United  States 
to  carry  on  the  coasting  trade,  it  is  urged,  is  necessary  for  a  steam 
ferry-boat.  If  this  be  so,  then  a  license  from  the  State  would  be 
of  no  avail,  and  need  not  be  obtained.  The  States  have  exercised 
the  right  to  license  and  regulate  ferries  from  the  commencement 
of  the  government  to  this  day."  * 

The  doctrine  of  this  case  was  approved  in  1861  by  the 
Supreme  Court.2 

It  is,  therefore,  well  established  that,  so  far  as  concerns 
power  over  interstate  communication,  a  Federal  license 
is  not  required  for  the  conduct  of  an  interstate  ferry  not 
engaged  in  coastwise  navigation,  and  that  the  possession 
of  such  a  license  does  not  authorize  a  vessel  to  engage  in 
such  ferriage  in  violation  of  State  law.3 

1  The  Steam  Ferry  Boat,  William  Pope,  i  Newb.  Adm.  261. 

2  Conway  v.  Taylor's  Executor,  1  Black  603. 

3  Newport  v.  Taylor,  16  B.  Mon.  (Ky.)  699 ;  Chilvers  v.  People,  n  Mich. 
43;  Midland  Ferry  Co.  v.  Wilson,  28  N.  J.  Eq.  537;  Carroll  v.  Campbell, 
108  Mo.  550. 


CARRIERS  AND   CORPORATIONS 


131 


In  this  respect  the  rule  applicable  to  ferries  was  in  no 
way  exceptional.  A  ferry  is  a  public  highway,  —  aa 
continuation  of  a  road/'  and  the  rule  applied  to  it  was 
the  one  applicable  to  all  other  carriers.  The  important 
fact  is  that  all  transportation,  when  considered  as  a 
business  in  itself  and  in  relation  to  the  carrier,  except 
foreign  commerce  and  the  coasting  trade,  was  within 
State  control  and  beyond  Federal  jurisdiction. 

Federal  powers  over  interstate  commerce  being  then 
small  in  extent,  very  few  restrictions  were  needed.  Con- 
gress had  been  given  authority  to  raise  revenue  by  a 
tariff  on  foreign  commerce.  This  power  was  restricted 
by  the  rule  of  uniformity  and  by  the  provision  that  no  tax 
or  duty  should  be  laid  on  articles  exported  from  any 
State .  Congress  was  given  a  limited  authority  over  coast- 
ing navigation,  but  had  no  control  over  communication 
by  land,  or  by  interior  waters.  Its  power  over  naviga- 
tion was  restricted  by  the  provisions  that  no  preference 
should  be  given  to  ports  of  one  State  over  those  of  another, 
and  that  vessels  bound  to  or  from  one  State  should  not 
be  obliged  to  enter,  clear,  or  pay  duties  in  another. 

Aside  from  this,  the  Federal  power  over  commerce, 
Edmund  Randolph  said, 

"extends  to  little  more  than  to  establish  the  forms  of  com- 
mercial intercourse  between  the  States  and  to  keep  the  prohibi- 
tions which  the  Constitution  imposes  upon  that  intercourse  undi- 
minished in  their  operation;  that  is,  to  prevent  taxes  on  imports 
or  exports,  preferences  to  one  port  over  another  by  any  regulation 
of  commerce  or  revenue ;  and  duties  upon  entering  or  clearing  of 
the  vessels  of  one  State  in  the  ports  of  another." * 

1  Opinion  on  U.  S.  Bank  Bill,  Feb.  12,  1791;  see  Federalist,  No.  42. 


132 


THE   FEDERAL  POWER  OVER 


So  far  as  concerns  commerce  among  the  States,  there- 
fore, the  rule  of  the  Constitution  was  free  ships,  free 
goods,  and,  except  in  the  foreign  and  coasting  trade, 
non-interference  with  carriers.  From  these  small  be- 
ginnings the  present  Federal  power  has  developed. 

In  Gibbons  v.  Ogden,1  a  case  which  concerned  only 
the  Federal  power  over  navigation,  the  power  was  de- 
clared to  be  exclusive.  In  Brown  v.  Maryland2  it  was 
held  that  a  State  tax  upon  the  sale  of  imported  goods  by 
the  importer  in  original  packages  was  prohibited,  not 
only  by  the  express  provisions  of  the  Constitution,  but 
also  by  the  commerce  clause. 

This,  although  apparently  not  so  recognized  at  the 
time,  was  an  important  extension  of  the  meaning  of  the 
commerce  clause.  Aside  from  the  prohibition  upon 
taxation  of  imports  and  exports,  the  Constitution,  as 
understood  when  framed  and  adopted,  imposed  no  limi- 
tations upon  the  taxing  powers  of  the  States. 

"The  inference  from  the  whole  is,  that  the  individual  States 
would  under  the  proposed  Constitution,  retain  an  independent 
and  uncontrollable  authority  to  raise  revenue  to  any  extent  of 
which  they  may  stand  in  need,  by  every  kind  of  taxation,  except 
duties  on  imports  and  exports."  3 

The  great  importance  of  Brown  v.  Maryland  is  that 
by  that  decision  this  construction  was  definitely  disap- 
proved. The  holding  of  the  case  is,  in  substance,  that 
the  Federal  power  derived  from  the  commerce  clause, 
being  an  exclusive  power,  and  including,  as  Randolph 
had  said,  power  "to  prevent  taxes  on  imports  or  exports," 

1  9  Wheat,  i.  2  12  ibid.  445.  3  Federalist,  Nos.  33,  32. 


CARRIERS  AND   CORPORATIONS  133 

amounted  in  effect  to  an  original  limitation  upon  State 
powers. 

The  new  theory  of  construction,  when  adopted,  may 
have  seemed  of  small  importance,  for  the  tax  then  in 
question  was  in  any  event  unconstitutional.  In  the  case 
of  the  State  Freight  Tax,1  however,  its  real  importance 
began  to  appear.  The  tax  there  involved  was  imposed 
by  a  State  upon  every  ton  of  freight  carried  within  its 
limits.  Such  a  tax,  the  State  authorities  considered,  was 
not  strictly  a  tax  upon  imports  or  exports.  On  the 
other  hand,  the  burden  which  it  imposed,  upon  com- 
mercial intercourse  among  the  States,  was  as  substantial 
as  it  would  have  been,  had  it  fallen  within  the  precise 
terms  of  the  constitutional  prohibition.  The  Court 
said: — 

"It  would  hardly  be  maintained,  we  think,  that  had  the  State 
established  custom-houses  on  her  borders,  wherever  a  railroad 
or  canal  comes  to  the  State  line,  and  demanded  at  these  houses 
a  duty  for  allowing  merchandise  to  enter  or  leave  the  State  upon 
one  of  those  railroads  or  canals,  such  an  imposition  would  not  have 
been  a  regulation  of  commerce  with  her  sister  States.  Yet  it  is 
difficult  to  see  any  substantial  difference  between  the  supposed 
case  and  the  one  we  have  in  hand."  2 

The  tax  was  held  invalid  because  prohibited  by  the 
commerce  clause.  The  Court  had,  but  a  short  time 
before  this  decision,  held  that  the  words  "  exports  "  and 
"imports"  as  used  in  the  Constitution  refer  only  to 
foreign  trade.3  The  clause  which  was  intended  to  for- 
bid State  taxation  of  interstate  as  well  as  foreign  trade 

1  15  Wall.  232.  2  15  Wall.  276. 

3  Woodruff  v.  Parham,  8  Wall.  123. 


134  THE   FEDERAL  POWER   OVER 

having  thus  been  so  narrowed  as  to  fail  of  its  full  purpose, 
the  commerce  clause  was  broadened  so  as  to  take  its 
place,  and,  thus  construed,  was  applied  so  as  to  operate 
upon  interstate  carriers  not  engaged  in  the  coasting 
trade.1  The  widening  of  the  Federal  authority  appears 
also  in  the  reasoning  and  expressions  of  the  Court  in  the 
case  of  the  State  Tax  on  Gross  Receipts,2  although  the 
actual  rulings  in  both  cases  were  consistent  with  early 
theories.  In  the  first  case  a  State  tax  on  every  ton  of 
freight  carried  in  Pennsylvania  was  declared  unconsti- 
tutional, while  in  the  second  a  tax  upon  the  carrier  of  a 
certain  sum  for  every  dollar  received  was  upheld,  —  the 
difference  being  that  the  first  tax  fell  directly  upon 
the  shipper,  while  the  second  fell  but  indirectly  upon 
the  shipper  and  directly  upon  the  carrier.  So  far  as  the 
Federal  government  was  concerned  the  amount  which 
the  carrier  might  charge  for  transportation  was  not  a 
subject  of  regulation.  We  concede,  the  Court  said, 
"the  right  of  the  owners  of  artificial  highways  ...  to 
exact  what  they  please  for  the  use  of  their  ways."  3 

The  subject  was  one  which  received  great  attention  at 
that  time  both  in  and  out  of  Congress.4    When,  there- 

1  Something  like  this  construction  of  the  clause  is  suggested  in  Dr.  James 
McHenry's  "Notes  on  the  Federal  Constitution."  Under  date  of  Sept.  i, 
1 787,  he  says :  "  Perhaps  a  power  to  restrain  any  State  from  demanding  tribute 
from  citizens  of  another  State"  for  navigating  interstate  waters  "is  compre- 
hended in  the  power  to  regulate  trade  between  State  and  State."  See  papers 
contributed  by  Professor  Bernard  C.  Steiner  to  American  Historical  Review, 
April,  1906,  Vol.  11,  p.  595. 

2  15  Wall.  232. 

3  15  Wall.  277. 

4  House  Report  No.  57,  40th  Cong.,  2d  Sess.,  June  9,  1868,  supporting 
Federal  power  to  regulate  rates,  but  with  a  strong  minority  report.  Senate 
Report  No.  462,  42d  Cong.,  3d  Sess.,  Feb.  20,  1873.  A  majority  of  this 
committee  pass  over  the  constitutional  question,  because  in  any  event  op- 
posed to  Congressional  legislation  at  that  time.     A  minority  reported  against 


CARRIERS  AND   CORPORATIONS 


135 


fore,  the  question  of  State  authority  arose  again  in  1874, 
the  Court  repeated  its  former  statement  with  greater 
emphasis. 

"This  unlimited  right  of  the  State  to  charge,  or  to  authorize 
others  to  charge,  toll,  freight,  or  fare  for  transportation  on  its 
roads,  canals  and  railroads,  arises  from  the  simple  fact  that  they 
are  its  own  works,  or  constructed  under  its  authority.  It  gives 
them  being.  It  has  a  right  to  exact  compensation  for  their  use. 
It  has  a  discretion  as  to  the  amount  of  that  compensation.  That 
discretion  is  a  legislative — a  sovereign  —  discretion,  and  in  its  very 
nature  is  unrestricted  and  uncontrolled.  The  security  of  the  public 
against  any  abuse  of  this  discretion  resides  in  the  responsibility 
to  the  public  of  those  who,  for  the  time  being,  are  officially  invested 
with  it.  In  this  respect  it  is  like  all  other  legislative  power  when 
not  controlled  by  specific  constitutional  provisions,  and  the  courts 
cannot  presume  that  it  will  be  exercised  detrimentally."  ? 

This  doctrine  was  followed  without  question  in  1876.2 
Ten  years  later  this  long  considered  and  well  estab- 
lished rule  was  changed.  The  old  doctrine  was  not 
abandoned  hastily,  but  because,  in  the  language  of  Mr. 
Justice  Miller,  "it  is  impossible  to  see  any  distinction 
in  its  effect  upon  commerce  of  either  class  between  a 
statute  which  regulates  the  charges  for  transportation, 
and  a  statute  which  levies  a  tax  for  the  benefit  of  the 
State  upon  the  same  transportation."  3 

The  States  being  thus  deprived  of  the  power  to  regu- 

the  Federal  power.  Senate  Report  No.  307,  43d  Cong.,  1st  Sess.,  April  24, 
1874, _ —  the  so-called  "  Windom  Report,"  in  favor  of  the  Federal  power,  over 
the  dissent  of  four  members  of  the  committee,  including  Roscoe  Conkling. 
These  minority  reports  deserve  special  notice  because  the  view  thus  stated 
was  later  approved  by  the  Supreme  Court. 

1  R.  R.  Co.  v.  Maryland  (U.  S.,  1874),  21  Wall.  456,  471. 

2  Peik  v.  Chicago,  etc.,  R.  Co.,  94  U.  S.  164. 

3  Wabash  Ry.  Co.  v.  Illinois,  118  U.  S.  557,  570;  reversing  People  v.  Wa- 
bash Ry.  Co.,  104  111.  476. 


136  THE   FEDERAL   POWER   OVER 

late  interstate  rates,,the  doctrine  has  now  become  current 
that  the  Constitution  gave  this  power  to  Congress.  Of 
course  the  argument  by  which  the  limitation  of  State 
jurisdiction  was  achieved,  if  good  at  all,  should  equally 
be  good  as  a  limitation  upon  Federal  power.  Congress 
is  forbidden  to  tax  exports  from  any  State;  clearly,  then, 
under  the  rule  applied  in  the  case  of  the  State  Freight 
Tax,  like  the  States,  it  cannot  tax  transportation  from 
one  State  to  another,  and  as,  in  the  phrase  employed 
by  Mr.  Justice  Miller  in  the  case  of  the  Wabash  Rail- 
way, it  is  impossible  to  see  a  distinction  in  its  effect  upon 
commerce  between  taxation  and  regulation  of  rates, 
therefore,  the  conclusion  should  have  been  that  Congress 
is  constitutionally  unable  to  regulate  interstate  rates. 

The  argument  was  used,  however,  only  against  the 
States.  So  far  as  concerns  Federal  power  quite  a  dif- 
ferent argument  is  used.  Congress,  it  is  said,  is  not  ex- 
pressly given  this  power,  neither  is  the  power  expressly 
denied,  and  as  it  no  longer  exists  in  the  States,  it  must, 
so  it  is  said,  belong  to  Congress.  Upon  this  argument, 
and  upon  no  other,  is  based  the  contention  of  Federal 
jurisdiction  to  regulate  freight  rates. 

The  method  of  construction  seems  an  inversion  of  the 
principle  still  taught  in  the  schools,  for  interpretation  of 
State  and  Federal  constitutions,  but  the  departure,  pos- 
sibly, is  less  of  law,  than  in  the  facts  of  modern  trans- 
portation. This,  however,  is  clear,  —  that  the  Court, 
under  circumstances  wholly  unforeseen,  has  sought  only 
to  follow  constitutional  purposes.  Its  decisions  upon 
this  branch  of  the  subject  probably  go  to  the  limit  of 
Federal  power,  and  extension  of  present  rules  would,  as 


CARRIERS  AND   CORPORATIONS  137 

has  been  shown  by  Mr.  Olney  *  and  Mr.  Morawetz,2 
be  embarrassed  by  extraordinary  constitutional  diffi- 
culties. 

Federal  power  has  also  been  extended  in  other  direc- 
tions so  as  to  prevent  State  legislation,  which  would  in- 
terfere with,  or  burden,  interstate  transportation  or 
trade,  or  obstruct  navigation  of  public  waters.  The 
important  feature  about  this  history  is  that  the  power 
which  was  originally  given  to  Congress  in  order  to  se- 
cure "an  unrestrained  intercourse  between  the  States"  3 
has  developed,  under  the  decisions  of  the  Supreme 
Court,  subject  to  the  influence  of  this  constitutional 
purpose  only,  and  with  no  other  end  in  view.  The 
States  have  been  deprived  of  power  to  interfere  with 
the  freedom  of  interstate  communication,  while  on  the 
other  hand  the  nature  of  the  jurisdiction  which  Congress 
has  acquired  over  the  avenues  of  interstate  trade,  does 
not,  in  any  proper  view  of  the  Constitution,  authorize 
it  to  close  those  avenues  to  any  person. 

It  is  still  true,  as  Professor  Tucker  said,  that  "the 
whole  Constitution,  in  all  of  its  parts,  looks  to  the  se- 
curity of  free  trade  in  persons  and  goods  between  the 
States  of  the  Union,  and  by  this  clause  prohibits  either 
Congress  or  the  States  to  interfere  with  this  freedom  of 
intercourse  and  trade."  4 

1  "Legal  Aspects  of  Congressional  Railroad  Rate-Making,"  North  Amer- 
ican Review,  October,  1905. 

2  "The  Power  of  Congress  to  Regulate  Railway  Rates,"  18  Harvard  Law 
Review,  572. 

3  Federalist,  No.  11. 

4  Tucker,  Constitution,  Sec.  256. 


138  THE  FEDERAL  POWER  OVER 


CHAPTER  VI 

FEDERAL  INCORPORATION 

The  differences  of  opinion  which  have  existed  over 
the  Federal  power  of  incorporation  have  arisen  from 
different  conceptions  of  the  nature  of  a  charter.1  If 
it  be  regarded  as  the  legislative  organization  of  an  arti- 
ficial person,  in  whose  favor  State  laws  forbidding  per- 
petuities, accumulations,  and  combinations  in  restraint  of 
trade  are  by  the  nature  of  the  organization  necessarily 
suspended,  the  existence  of  such  a  dispensing  power  in 
the  Federal  government  may  well  be  doubted.  Jeffer- 
son, Randolph,  and  many  others,  on  this  and  other 
grounds  denied  the  Federal  power  of  incorporation. 

On  the  other  hand,  if  a  charter  be  regarded  as  of  the 
nature  of  a  partnership  agreement  involving  no  public 
policy,  but  like  a  partnership  to  be  judged  by  its  objects, 
the  organization  of  corporations  for  Federal  purposes 
bears  a  very  different  relation  to  Federal  powers.  This 
was  Hamilton's  view  of  a  corporation.     He  said:  — 

"  A  strange  fallacy  seems  to  have  crept  into  the  manner  of  think- 
ing and  reasoning  upon  the  subject.  Imagination  seems  to  have 
been  unusually  busy  concerning  it.     An  incorporation  seems  to 

1  Among  the  articles  on  the  general  subject  may  be  mentioned,  "  Federal 
Control  of  Corporations,"  Yale  Law  Journal,  Vol.  XIV,  p.  301,  in  which 
Mr.  Thomas  Thacher  argues  that  the  plan  proposed  by  Commissioner  Gar- 
field substitutes  paternalism  for  liberty;  and  "A  National  Incorporation 
Law,"  Michigan  Law  Review,  Vol.  II,  pp.  358,  501,  in  which  Professor 
Horace  L.  Wilgus  advocates  such  a  law. 


CARRIERS  AND   CORPORATIONS  139 

have  been  regarded  as  some  great  independent  substantive  thing ; 
as  a  political  engine,  and  of  peculiar  magnitude  and  moment; 
whereas,  it  is  truly  to  be  considered  as  a  quality,  capacity,  or 
means  to  an  end.  Thus  a  mercantile  company  is  formed,  with  a 
certain  capital,  for  the  purpose  of  carrying  on  a  particular  branch 
of  business.  Here  the  business  to  be  prosecuted  is  the  end.  The 
association,  in  order  to  form  the  requisite  capital,  is  the  primary 
mean.  Suppose  that  an  incorporation  were  added  to  this,  it 
would  only  be  to  add  a  new  quality  to  that  association ;  to  give 
it  an  artificial  capacity,  by  which  it  would  be  enabled  to  prosecute 
the  business  with  more  safety  and  convenience." 

Hamilton,  therefore,  supported  the  authority  of  Con- 
gress to  create  a  corporation  for  any  lawful  end  of  the 
Federal  government. 

"Thus,"  he  said,  "a  corporation  may  not  be  erected  by  Con- 
gress for  superintending  the  police  of  the  City  of  Philadelphia, 
because  they  are  not  authorized  to  regulate  the  police  of  that  city. 
But  one  may  be  erected  in  relation  to  the  collection  of  taxes,  or 
to  the  trade  with  foreign  countries,  or  to  the  trade  between  the 
States,  or  with  the  Indian  tribes ;  because  it  is  the  province  of  the 
Federal  government  to  regulate  those  objects,  and  because  it  is 
incident  to  a  general  sovereign  or  legislative  power  to  regulate  a 
thing,  to  employ  all  the  means  which  relate  to  its  regulation  to  the 
best  and  greatest  advantage."  * 

The  terms  in  which  these  opposing  views  are  stated 
show  that  the  issue  concerned,  not  Federal  authority 
to  create  an  artificial  person,  but  rather  the  extent  of 
corporate  powers  to  be  granted.  If  wide  powers  are 
given,  agencies  whose  operation  has  been  likened  to 
restraint  of  trade  may  be  put  into  corporate  form,  and 

1  Opinion  on  U.  S.  Bank  Bill.  Hamilton's  Works  (Putnam),  Vol.  3, 
p.  185. 


i4o  THE   FEDERAL  POWER   OVER 

accumulations  and  perpetuities  which  nature  denies  to 
individuals,  and  the  common  law  forbids  to  combina- 
tions, may  be  authorized  by  charter.  On  the  other 
hand,  if  narrow  powers  be  given,  and  the  amount  of 
capital  restricted,  corporations  may  be  organized  so 
as  hardly  to  be  distinguished  from  partnerships.  The 
question  was  not,  however,  thus  stated,  but  was  treated 
as  though  a  question  of  Federal  power  to  grant  any  cor- 
porate charter  whatever. 

In  this  shape  the  discussion  goes  back  to  the  formation 
of  the  Constitution,  and  upon  the  organization  of  the 
Federal  government  was  the  first  constitutional  question 
which  became  the  subject  of  extended  debate. 

Federal  power  to  charter  banks.  It  appears  that  on 
the  1 8th  of  August  it  was  proposed  in  the  Constitutional 
Convention  to  give  Congress  power  to  grant  charters  of 
incorporation  in  cases  where  the  public  good  might  re- 
quire them  and  the  authority  of  a  single  State  might  be 
incompetent;  to  regulate  stages  on  the  post  roads;  to 
regulate  affairs  with  the  Indians;  and  to  establish  in- 
stitutions for  the  promotion  of  agriculture,  commerce r 
trade,  and  manufactures.  On  the  14th  of  September, 
according  to  Elliot,  Franklin  moved  that  Congress  be 
authorized  to  provide  for  cutting  canals.  Such  a  power, 
Wilson  said,  was  necessary  to  prevent  a  single  State 
from  obstructing  the  general  welfare.  These  motions 
were  defeated,  —  the  latter,  according  to  Bancroft,1 
on  the  ground  that  the  expense  would  be  a  general  bur- 
den while  the  benefit  would  be  local. 

1  "History  of  the  United  States,"  Vol.  VI,  pp.  360-361. 


CARRIERS  AND   CORPORATIONS  141 

The  vote  throws  no  light  upon  the  purposes  of  the 
Convention,  and  deserves  attention  only  because  often 
mentioned  as  though  indicating  that  the  Constitution  as 
already  drawn  conveyed  the  power  of  incorporation. 
It  is  capable  of  the  opposite  construction.  Nearly  forty 
years  afterward,  when  the  vote  was  discussed  in  Con- 
gress, Senator  Cobb,  turning  to  Rufus  King,  who  had 
been  a  member  of  the  Convention,  asked  whether  the 
reason  for  the  defeat  of  the  resolution  was  that  the  Con- 
vention considered  the  power  already  granted.  King 
replied  that  "such  a  thing  was  not  thought  of."  x 

Between  these  two  opinions  of  the  significance  of  this 
vote  stand  Hamilton,  Randolph,  and  probably  Washing- 
ton himself,  for,  though  he  signed  the  bank  bill,  he 
certainly  did  so  on  other  grounds  than  this  defeated 
resolution,  and  is  said  to  have  acted  with  great  doubt 
and  hesitation.2 

Hamilton  in  his  opinion  submitted  to  President 
Washington  Feb.  23,  1791,  supporting  the  bank  bill, 
said  of  this  vote:  — 

"What  was  the  precise  nature  or  extent  of  this  proposition,  or 
what  the  reasons  for  refusing  it,  is  not  ascertained  by  any  authentic 
document,  or  even  by  accurate  recollection.  As  far  as  any  such 
document  exists,  it  specifies  only  canals.  ...  It  must  be  con- 
fessed, however,  that  very  different  accounts  are  given  of  the  im- 
port of  the  proposition,  and  of  the  motives  for  rejecting  it.  Some 
affirm  that  it  was  confined  to  the  opening  of  canals  and  obstructions 
in  rivers;   others,  that  it  embraced  banks;   and  others,  that  it 

1  Cong.  Deb.,  Vol.  1,  p.  652,  Feb.  23,  1825.  The  tendency  now  is  prob- 
ably to  accept  this  view  as  the  correct  interpretation  of  the  vote.  See,  for 
example,  House  Report  No.  2491,  59th  Cong.,  1st  Sess. 

2  Speech  of  P.  B.  Porter  in  House  of  Representatives,  Jan.  18,  181 1. 
Annals  nth  Cong.,  3d  Sess.,  627. 


142  THE   FEDERAL  POWER   OVER 

extended  to  the  power  of  incorporating  generally.  Some,  again, 
allege  that  it  was  disagreed  to  because  it  was  thought  improper 
to  vest  in  Congress  a  power  of  erecting  corporations.  Others, 
because  it  was  thought  unnecessary  to  specify  the  power,  and  in- 
expedient to  furnish  an  additional  topic  of  objection  to  the  Con- 
stitution. In  this  state  of  the  matter,  no  inference  whatever  can 
be  drawn  from  it." 

Randolph's  opinion  submitted  to  the  President  on 
Feb.  12,  1 79 1,  denied  Federal  power  to  incorporate  a 
bank,  but  agreed  with  Hamilton's  opinion  of  the  view 
which  should  be  taken  of  proceedings  in  the  Convention. 
He  said:  — 

"An  appeal  has  been  made  by  the  enemies  of  the  bill  to  what 
passed  in  the  Federal  Convention  on  the  subject.  But  ought  not 
the  Constitution  to  be  decided  on  the  import  of  its  own  expressions  ? 
What  may  not  be  the  consequence,  if  an  almost  unknown  history 
should  govern  the  construction  ?  " 

It  may  be  fair  to  assume  that  Randolph  and  Hamilton 
would  not  both  have  made  this  argument  to  the  President 
upon  matters  within  his  personal  experience  as  well 
as  within  theirs,  had  they  not  reason  to  believe  that 
Washington's  recollections  were  not  different  from  their 
own. 

The  question  of  Federal  power  to  charter  a  bank, 
therefore,  was  not  to  be  decided  by  reference  to  any 
specific  grant  of  power,  or  to  definite  construction  placed 
upon  the  Constitution  by  its  framers,  but  could  be  de- 
termined only  upon  consideration  of  the  nature  and 
purposes  of  the  Federal  government  and  of  its  relations  to 
the  States.  In  this  aspect  the  question  was  surrounded 
with  difficulties  not  now  fully  to  be  appreciated. 


CARRIERS  AND  CORPORATIONS  143 

On  the  one  hand,  wide  distrust  of  corporations  made 
the  States  unwilling  to  part  with  their  powers  of  control, 
and  on  the  other  hand,  the  almost  impossible  disorders  of 
the  currency  embarrassed  every  movement  of  govern- 
ment in  collecting  revenue,  transmitting  its  funds  from 
one  point  to  another,  and  exchanging  the  money  received 
into  a  medium  current  at  the  place  of  disbursement. 
There  were  in  179 1  but  three  banks  in  the  United  States, 
there  was  no  national  currency,  and  the  notes  which 
were  in  existence,  part  issued  by  these  banks,  others  by 
corporations  and  individuals,  were  of  value  only  in  local 
circulation.1 

To  facilitate  the  operation  of  government  under  these 
difficulties  the  bank  bill  was  passed  and  approved  by 
the  President.  Upon  these  grounds  too  it  was  sus- 
tained,—  not  because  authorized  by  any  clause  of  the 
Constitution,  but  because  the  bank  was  an  agent  em- 
ployed by  Congress  in  the  discharge  of  governmental 
functions. 

Throughout  this  vast  republic,  Mr.  Chief  Justice 
Marshall  said  in  the  great  case  of  McCulloch  v.  Mary- 
land, revenue  is  to  be  collected  and  expended.  The 
exigencies  of  the  nation  may  require  that  treasure,  raised 
in  the  North,  should  be  transported  to  the  South,  or  that 
raised  in  the  East,  conveyed  to  the  West.  This  may  be 
done  by  the  agency  of  the  bank,  and  the  sole  constitu- 
tional objection  to  the  adoption  of  this  agency  is  in  the 
argument  that  the  power  to  create  a  corporation  is  an 
attribute  of  sovereignty  not  expressly  conferred  on  Con- 

1  See  McMaster,  "History  of  the  People  of  the  United  States,"  Vol.  IV, 
p.  280  et  seq. 


144  THE   FEDERAL  POWER  OVER 

gress.  But  under  the  Constitution  sovereign  powers  are 
divided  between  the  Union  and  the  States.  To  which 
then  of  these  two  governments  does  the  power  to  cre- 
ate a  corporation  for  performance  of  these  functions  be- 
long? "The  power  of  creating  a  corporation/ '  he  said, 
"though  appertaining  to  sovereignty,  is  not,  like  the 
power  of  making  war,  or  levying  taxes,  or  of  regulating 
commerce,  a  great  substantive  and  independent  power, 
which  cannot  be  implied  as  incidental  to  other  powers, 
or  used  as  a  means  of  executing  them.  It  is  never  the 
end  for  which  other  powers  are  exercised,  but  a  means 
by  which  other  objects  are  accomplished  .  .  .  No  suffi- 
cient reason  is,  therefore,  perceived,  why  it  may  not 
pass  as  incidental  to  those  powers  which  are  expressly 
given,  if  it  be  a  direct  mode  of  executing  them."  * 

Upon  this  ground  then,  and  upon  this  ground  only,  the 
bank  act  was  sustained,  that  the  corporation  thereby 
created  was  a  direct  mode  of  exercising  powers  given 
by  the  Constitution  to  Congress.  With  this  decision 
the  question  was  settled,  so  far  as  the  Supreme  Court 
can  finally  set  at  rest  a  question  of  constitutional  law. 
The  refusal  of  the  legislative  and  executive  branches 
of  government  to  accept  the  reasoning  of  the  Chief 
Justice,  the  removal  of  government  deposits  by  Secre- 
tary Taney  in  President  Jackson's  administration,  and 
the  refusal  of  Congress  to  renew  the  charter,  are  well 
known. 

It  was  not  until  the  passage  of  the  national  bank 
act  under  the  pressure  of  the  Civil  War,  that  the  country 
finally  accepted  the  rule  of  McCulloch  v.  Maryland. 

1  McCulloch  v.  Maryland,  4  Wheat.  316,  408-411. 


CARRIERS  AND   CORPORATIONS  145 

This  statute,1  entitled  "An  act  to  provide  a  national 
currency  by  a  pledge  of  United  States  bonds,  and  to  pro- 
vide for  the  circulation  and  redemption  thereof,"  was 
opposed  on  the  ground  that  incorporation  for  these  pur- 
poses was  not  a  direct  mode  of  exercising  powers  given 
by  the  Constitution.  This  argument  was  well  stated 
by  Senator  Garrett  Davis  of  Kentucky.     He  said :  — 

"I  have  always  entertained  the  opinion  —  at  least  since  the 
decision  of  the  case  of  McCulloch  v.  Maryland  —  that  for  the  pur- 
poses of  a  fiscal  agency,  Congress  had  a  right  to  charter  a  United 
States  bank,  but  I  have  doubted  the  power  of  Congress  to  authorize 
the  bank  to  issue  a  currency.  That  it  would  have  the  power  to 
give  the  other  functions  of  a  bank  to  its  fiscal  agent  for  the  con- 
venience of  the  collection,  custody,  disbursement,  and  transfer 
of  its  funds  from  one  point  to  another,  I  entertain  no  doubt;  but 
I  seriously  distrust  the  correctness  of  the  position  that  Congress, 
under  the  power  'to  coin  money  and  regulate  the  value  thereof,' 
can  resort  to  any  such  indirect  and  irregular  power  as  to  authorize 
its  fiscal  agent  to  issue  paper  to  circulate  as  money;  even  though 
it  is  redeemable  in  gold  and  silver;  but  that  Congress  have  no 
power  to  substitute  a  declared  irredeemable  paper  money  as  the 
medium  of  values  ...  I  entertain  no  doubt  whatever."  2 

To  this  Senator  Sumner  replied  that  the  purpose  of 
the  bill  was  to  create  "an  immense  instrument  for  na- 
tional credit."  Is  not  national  credit,  he  asked,  as  much 
a  national  instrument  as  a  navy- yard,  an  arsenal,  or  a 
mint  ?  "Where  will  be  your  navy-yard,  your  arsenal,  or 
your  mint,  if  the  credit  of  this  country  is  allowed  to 
fail?"3 

1  Act  of  June  3,  1864,  13  Stat.  99.  See,  too,  Act  of  Feb.  25,  1863,  12  Stat. 
665. 

2  Speech  in  Senate,  May  2,  1864.  Cong.  Globe,  38th  Cong.,  1st  Sess., 
Part  3,  p.  2020. 

3  Cong.  Globe,  April  27,  1864,  38th  Cong.,  1st  Sess.,  Part  2,  p.  1894. 

L 


146  THE   FEDERAL  POWER   OVER 

Upon  the  argument  thus  stated  by  Senator  Sumner, 
the  national  banking  act  was  sustained  by  the  Supreme 
Court. 

"It  rests  on  the  same  principle  as  the  act  concerning  the  second 
bank  of  the  United  States.  The  reasoning  of  Secretary  Hamilton 
and  of  this  court  in  McCulloch  v.  Maryland  (4  Wheat.  316)  and 
in  Osborne  v.  The  Bank  of  the  United  States  (9  id.  708),  there- 
fore, applies.  The  national  banks  organized  under  the  act  are 
instruments  designed  to  be  used  to  aid  the  government  in  the 
administration  of  an  important  branch  of  the  public  service."  * 

Organization  of  trading  companies.  In  the  foregoing 
history  of  the  establishment  of  Federal  power  to  in- 
corporate governmental  agencies,  the  advocates  of  a 
national  system  for  the  organization  of  private  mer- 
cantile corporations  find  no  assistance.  Such  corpora- 
tions are  not  instruments  of  public  administration,  and 
their  incorporation  cannot  be  sustained  on  grounds 
which  have  upheld  national  banks.  To  support  the 
proposed  legislation  some  further  constitutional  ground 
is  needed,  such,  for  example,  as  seems  to  be  indicated  by 
Hamilton's  suggestion,  already  quoted,  that  Congress 
may  erect  corporations  "in  relation  to  the  trade  between 
the  States,"  and  in  relation  to  foreign  trade.2 

It  is  significant  that  shortly  before  Hamilton  ex- 
pressed this  opinion,  Madison  stated  in  Congress,  that 
the  Federal  government  was  without  power  to  charter 
manufacturing  companies,  or  companies  to  cut  canals.3 

1  Farmers,  etc.,  National  Bank  v.  Dearing,  91  U.  S.  29,  33. 

2  See,  too,  James  Wilson,  "Madison's  Journal  of  Constitutional  Conven- 
tion," Scott's  ed.,  Vol.  II,  pp.  549,  725;  "Doc.  Hist.  Const.  U.  S.  A.,"  Vol. 
HI,  pp.  555.  744,  745- 

Speech  in  the  House  of  Representatives,  Feb.  2,  1791.  Annals  1st 
Cong.,  Vol.  2,  p.  1894-1902. 


CARRIERS  AND   CORPORATIONS  147 

As  to  manufacturing  corporations  the  objection  is  easily 
understood,  for  manufacture  was  not  then,  and  is  not 
now,  part  of  that  commerce  over  which  Congress  has 
power  of  regulation.  The  canals  which  were  then  con- 
templated, however,  were  for  interstate  transportation. 
If  Congress  could,  in  Hamilton's  phrase,  erect  corpora- 
tions with  relation  to  the  trade  between  the  States, 
would  not  canal  companies  be  first  to  fall  within 
Federal  power?  What  is  the  explanation  of  this  un- 
expected difference  between  Hamilton  and  Madison, 
joint  authors  of  the  Federalist? 

The  answer  is  in  the  constitutional  meaning  of  the 
phrase,  to  regulate  commerce.  The  Constitution  gives 
Congress  entire  control  over  foreign  relations.  Its 
power  over  interstate  trade  was,  on  the  other  hand,  a 
limited  power  to  protect  this  trade  from  burdens  else- 
where in  the  Constitution  forbidden,  such  as  State  taxes 
on  imports  and  exports.  Beyond  this,  Federal  power 
did  not  go.  Over  interstate  transportation,  not  con- 
ducted by  coastwise  navigation,  Congress  had  no  power.1 

Hamilton,  then,  referred  to  the  organization  of  cor- 
porations for  foreign  or  coastwise  navigation 2  or  having 
foreign  relations  as  in  the  case  of  the  Nicaragua  Mari- 
time Canal  Co.3    It  would  "not  be  doubted,"  he  said, 

1  Ante  Ch.  III. 

2  See  Act  of  March  3,  1829,  incorporating  the  Washington,  Alexandria  & 
Georgetown  Steam  Packet  Co.,  Cong.  Globe,  41st  Cong.,  2d  Sess.,  Part  1, 
p.  365.  Act  of  March  25,  1870,  16  Stat.  78,  incorporating  Washington  Mail 
Steamboat  Co.,  to  run  a  line  of  steamers  between  Washington,  Norfolk,  and 
other  ports,  Cong.  Globe,  41st  Cong.,  2d  Sess.,  Part  2,  pp.  1037,  1038, 
Part  III,  p.  2096.  Act  of  May  4,  1870,  16  Stat.  97,  incorporating  the 
Washington  &  Boston  Steamship  Co.,  41st  Cong.,  2d  Sess.,  Part  3,  p. 
2081-2082,  Part  4,  p.  3085. 

3  See  Cong.  Rec,  50th  Cong.,  2d  Sess.,  Vol.  XX,  p.  87,  25  Stat.  673.  Ap- 
pendix, p.  65  et  seq.     Also  speech  of  William  C.  Oates  in  House  of  Repre- 


148  THE   FEDERAL  POWER  OVER 

"that  if  the  United  States  should  make  a  conquest  of 
any  of  the  territories  of  its  neighbors,  it  would  possess 
a  sovereign  jurisdiction  over  the  conquered  territory. 
This  would  be  rather  a  result  from  the  whole  mass  of  the 
powers  of  the  Government,  and  from  the  nature  of  po- 
litical society,  than  a  consequence  of  either  of  the  powers 
specially  enumerated."  '  Organization  of  a  corporation 
to  exercise  over  foreign  territory  a  degree  of  control 
permitted  by  another  nation  affords,  therefore,  no  prece- 
dent for  the  organization  of  commercial  corporations 
to  do  business  among  the  States.  These  charters  Con- 
gress has  refused  to  grant,2  and  when  in  1870  the  Na- 
tional Bolivian  Navigation  Company  was  incorporated3 
the  bill  was  justified  on  the  ground  of  Federal  power  to 
grant  charters  for  foreign  commerce.4 

The  history  of  the  Federal  power  indicates  then  that 
Madison  and  Hamilton  by  their  expressions  on  the 
power  of  incorporation  meant  the  same  thing,  —  that 
while  Congress  could  create  a  corporate  agency  in 
foreign  relations,  or  charter  navigating  companies, 
nevertheless  for  operations  within  the  States,  Congress 
had  no  such  power. 

sentatives,  Dec.  21,  1888.  Cong.  Rec,  Vol.  XX,  Part  I,  p.  442  et  seq.  See, 
too,  statutes  relating  to  foreign  intercourse  by  cable;  Act  of  March  29, 
1867,  15  Stat.  10;  Act  of  May  5,  1866,  14  Stat.  44;  Act  of  July  25,  1882, 
22  Stat.  173;  Act  of  Aug.  8,  1882,  22  Stat.  371. 

1  Opinion  on  U.  S.  Bank  Bill.  See  also  "Annexation  and  Universal  Suf- 
frage," by  Professor  John  Bach  McMaster,  Forum,  December,  1898.  "The 
Status  of  our  New  Possessions,"  by  Professor  C.  C.  Langdell,  12  Harvard 
Law  Review,  365. 

2  See  debate  on  bill  to  incorporate  Asiatic  Commercial  Company,  42d 
Cong.,  2d  Sess.,  Part  III,  p.  3463  et  seq.  House  Report  No.  2209.  Also  on 
bill  to  incorporate  International  American  Bank,  Vol.  31,  Cong.  Rec,  Part 
7,  p.  6538  et  seq.,  etc. 

3  Act  of  June  29,  1870,  16  Stat.  168-169. 

4  Cong.  Globe,  41st  Cong.,  2d  Sess.,  Part  6,  p.  4846,  June  25,  1870; 
Cong.  Globe,  42d  Cong.,  2d  Sess.,  Part  3,  p.  1865,  March  21,  1872. 


CARRIERS  AND   CORPORATIONS  149 

This  appears  now  to  be  the  accepted  rule.  "  Corpora- 
tions are  created  by  the  sovereign,  whether  the  sovereign 
be  the  United  States  or  a  State.  In  this  regard  the  power 
of  Congress  is  limited,  while  the  power  of  the  State  is  un- 
limited. Whenever,  under  the  Constitution,  Congress 
can  exercise  a  power,  Congress  can  create  a  corporation 
to  carry  that  power  into  execution,  and  to  the  exclusion 
of  the  States  create  corporations  in  the  District  of  Co- 
lumbia and  all  territory  of  the  United  States,  and  in  all 
countries  subject  to  the  jurisdiction  of  the  United  States. 
Otherwise,  all  corporations  .  .  .  are  created  by  the 
States,  under  the  reserve  power  of  the  States.  At  com- 
mon law  all  public  corporations  are  subject  to  the  visi- 
torial  power  of  the  legislature,  and  all  private  corpora- 
tions are  subject  to  the  visitorial  power  of  the  courts. 
Congress  has  not  visitorial  power  over  corporations 
created  by  a  State."  * 

Incorporation  of  interstate  carriers.  Congress  has  now 
by  an  interesting  course  of  decisions  acquired  a  wide 
jurisdiction  over  transportation  among  the  States  by 
land,2  and  many  expressions  are  found  in  decided  cases, 
and  in  the  debates  of  Congress,  indicating  that  this  new 
authority  would  enable  the  Federal  government  to  build 
an  interstate  canal,3  or  to  charter  an  interstate  railroad. 
If  any  such  power  exist  it  is  of  very  recent  origin. 

In  the  early  days  of  the  Constitution,  there  was  no 
suggestion  that  Congress  could  under  its  powers  over 

1  House  Report  No.  2491,  59th  Cong.,  1st  Sess. 

2  Ante,  Ch.  V. 

3  See  remarks  of  Gaines  of  Tennessee  in  debate  on  bill  to  incorporate  the 
Lake  Erie  and  Ohio  River  Canal  Co.,  House  of  Representatives,  Feb.  26, 
1906,  59th  Cong.  Rec.,  pp.  3070-3078,  3098-3099,  3257. 


150  THE  FEDERAL  POWER   OVER 

commerce,  establish  lines  of  communication  between 
States.  It  was  argued  that  this  might  be  done  under  the 
power  to  establish  post-roads,  but  this  view  did  not  pre- 
vail, and  when  roads  were  built  the  sanction  of  the  States 
was  required.1  Thus,  on  Jan.  10,  1803,  Maryland 
passed  a  law  " giving  Congress  power"  to  appropriate 
money  for  the  repair  of  post-roads  within  the  State, 
"  provided  that  nothing  herein  contained  shall  extend, 
or  be  construed  to  extend,  to  authorize  them  to  pass  a 
law  for  the  opening  of  a  new  road."  Throughout  the 
long  history  of  the  Cumberland  Road,  the  practice  of 
securing  State  consent  was  followed.2  Even  with  this 
legislative  consent,  the  Federal  power  did  not  go  un- 
questioned.3 Without  State  consent  the  government 
was  powerless.  The  Federal  government  had  no  au- 
thority to  remove  obstructions  either  from  roads  or 
streams.  When  Congress  met  with  an  obstruction,  its 
remedy  was  to  turn  back  or  to  take  another  road.  An 
instance  of  this  is  found  in  the  act  of  March  26,  1804,4 
enacting:  — 

Sec.  4.  "That  whenever  it  shall  be  made  to  appear  to  the  satis- 
faction of  the  Postmaster  General,  that  any  road  established  by 
this  or  any  former  act,  as  a  post-road,  is  obstructed  by  fences, 
gates,  or  bars,  other  than  those  lawfully  used  on  turnpike  roads, 
to  collect  their  toll,  and  not  kept  in  good  repair  with  proper  bridges 
and  ferries,  where  the  same  may  be  necessary,  it  shall  be  the  duty 

1  See  Searight  v.  Stokes,  3  How.  151. 

2  See  the  interesting  "Political  and  Constitutional  Study  of  the  Cumber- 
land Road,"  by  Professor  Jeremiah  Simeon  Young,  of  Lake  Forest  Univer- 
sity, University  of  Chicago  Press,  1904. 

3  See  Clay,  speeches,  Vol.  I,  p.  69.  Von  Hoist,  "Constitutional  History," 
1750-1815,  pp.  389-390.     "Statesman's  Manual,"  Vol.  I,  p.  491. 

4  U.  S.  Stat.,  Vol.  2,  pp.  275,  277. 


CARRIERS  AND   CORPORATIONS  151 

of  the  Postmaster  General  to  report  the  same  to  Congress,  with  such 
information  as  can  be  obtained,  to  enable  Congress  to  establish 
some  other  road,  instead  of  it,  in  the  same  main  direction." 

Sometimes  States  insisted  upon  the  maintenance  of 
obstructions  to  routes  of  interstate  travel  which  were  not 
favored.  When  Pennsylvania  became  fearful  lest  the 
Susquehanna  River  should  form  a  highway,  whereby  the 
products  of  that  State  and  of  New  York  should  float  to 
a  market  at  Baltimore  rather  than  go  to  Philadelphia, 
laws  were  enacted  by  the  legislature  of  Pennsylvania  for- 
bidding the  removal  of  obstructions  to  the  navigation  of 
the  river.1  For  this  condition,  the  Federal  government 
could  offer  no  relief.  "  Nobody  has  contended,  and  I 
presume  that  nobody  will  contend,"  said  Senator  Mor- 
rill of  Maine,  in  1866,  "that  the  right  of  eminent  domain 
exists  anywhere  except  in  the  States.  Nobody  ever  did 
contend,  and  I  am  sure  nobody  ever  will,  that  the  right 
to  land,  the  title  to  real  estate,  ever  vested  in  the  Govern- 
ment of  the  United  States.  .  .  .  From  the  earliest 
period  of  this  Government  down  to  the  present  time, 
never  has  the  General  Government  undertaken  to  enter 
upon  the  soil  of  any  State  to  exercise  the  right  of  emi- 
nent domain  in  its  own  right  or  to  take  possession  of  the 
soil  of  the  several  States  except  by  the  consent  of  the 
States."  2  Land  could  be  acquired  then  only  by  negotia- 
tion, or  by  eminent  domain  when  this  right  was  granted 
by  the  States.     Many  statutes  of  this  sort  were  passed. 

1  Remarks  of  Senator  James  A.  Bayard  of  Delaware,  February,  1807,  An- 
nals gth  Cong.,  2d  Sess.,  56.  See  also  remarks  of  Senator  Martin  D.  Hardin 
of  Kentucky.     Annals  14th  Cong.,  2d  Sess.,  171. 

2  Cong.  Globe,  May  28,  1866,  39th  Cong.,  1st  Sess.,  p.  2853.  See  also 
remarks  of  Senator  Thomas  F.  Bayard  of  June  4,  1874.  Cong.  Rec,  Vol.  II, 
Part  V,  p.  4545- 


152 


THE   FEDERAL  POWER  OVER 


An  illustration  is  found  in  the  Act  of  North  Carolina  of 
18131  authorizing  the  United  States  to  obtain  sites  for 
light-houses  and  fortifications  by  application  to  the 
Governor  of  the  State,  who  thereupon  caused  proceed- 
ings to  be  instituted  in  the  State  courts  for  condemnation 
of  the  needed  property,  —  a  method  almost  diplomatic 
in  character. 

In  1875,  the  Federal  power  of  eminent  domain  was 
established.2  "It  is  true,"  said  the  Court,  "that  this 
power  of  the  Federal  government  has  not  heretofore 
been  exercised  adversely;  but  the  non-user  of  a  power 
does  not  disprove  its  existence,' '  —  a  doctrine  which 
Mr.  Justice  Bradley  later  extended,  so  that  the  power  in 
some  cases  may  now  be  exercised  within  a  State,  even 
over  its  protest.  "In  matters  of  foreign  and  interstate 
commerce,  there  are  no  States."  3 

When  the  Pacific  Railroads  were  chartered  by  Con- 
gress, this  power  did  not  exist.  The  roads  were  char- 
tered as  territorial  corporations,  deriving  their  author- 
ity, in  the  States  within  which  they  operated,  by  State 
permission  or  by  operation  under  State  charters.4 

1  Laws  of  1 796-1820,  Ch.  857. 

2  Kohl  v.  United  States,  91  U.  S.  367. 

3  Stockton  v.  Baltimore  &  N.  Y.  R.  R.  Co.,  32  Fed.  9. 

4  Among  the  many  statutes  relating  to  these  roads,  the  following  may  be 
mentioned:  Northern  Pacific,  organized  under  the  Act  of  Congress  of  July 
2,  1864,  13  Stat.  365;  May  7,  1866,  14  Stat.  355;  July  1,  1868,  15  Stat.  255. 
This  road  extended  into  three  States,  Wisconsin,  Minnesota,  and  Oregon.  It 
was  expressly  provided  by  the  Act  of  Congress,  that  before  building,  the 
consent  of  each  and  every  State  should  be  obtained.  These  were  given  as 
follows:  Wisconsin,  May  30,  1865,  Laws,  p.  575  ;  Minnesota,  March  2,  1865, 
p.  228;  Oregon,  Oct.  28,  1874,  p.  101.  Union  Pacific  Ry.,  organized 
under  Act  of  Congress  of  July  1,  1862,  12  Stat.  489;  July  2,  1864,  13  Stat. 
356;  March  3,  1865,  13  Stat.  504.  In  California  this  road  operated  under 
the  charter  granted  by  the  State  to  the  Central  Pacific  Ry.  Co.,  May  1,  1852, 
Laws,  p.  150;  see  Act  of  April  25,  1863,  repealed  by  Act  of  April  4,  1864, 
p.  344.     Nevada  gave  consent  by  Act  of  March  9,  1866.     On  the  eastern  end 


CARRIERS  AND   CORPORATIONS  153 

Since  that  time  Congress  has  authorized  the  con- 
struction of  bridges  over  navigable  waters  within  State 
territory,  granting  the  power  to  acquire  by  eminent 
domain  the  necessary  land  for  supports  and  ap- 
proaches,1 and  in  one  instance  has  granted  a  charter 
of  incorporation  for  these  purposes.2  In  these  cases 
Congress  may  have  acted  under  its  wide  jurisdiction 
over  navigable  waters.  Beyond  this  Federal  legislation 
has  not  gone. 

As  far  as  long  established  practice  can  fix  the  meaning 
of  the  Constitution,  the  extent  of,  and  limitation  upon, 
Federal  power  to  create  lines  of  communication  between 
States  are  fixed.  "It  is  evident,"  Gallatin  said  in  his 
report  on  internal  improvements  submitted  April  6, 
1808,  "that  the  United  States  cannot,  under  the  Con- 
stitution, open  any  road  or  canal  without  the  consent  of 
the  State  through  which  said  road  or  canal  must  pass." 
This  was  the  accepted  doctrine  for  nearly  a  century,  a 
doctrine  which  recognized  that  the  primary  relations  of 

the  road  was  to  be  constructed  under  the  charters  of  a  number  of  sub- 
sidiary State  corporations,  the  Leavenworth,  Pawnee  &  Western  R.  R.  Co. 
of  Kansas;  Hannibal  &  St.  Joseph  R.  R.  Co.  and  Pacific  R.  R.  Co.  of  Mis- 
souri; Union  Pacific  R.  R.  Co.,  Eastern  Division,  and  Burlington  &  Mis- 
souri R.  R.  Co.  of  Iowa.  Atlantic  &  Pacific  R.  R.  Co.,  organized  by  Act  of 
Congress,  July  27,  1866,  14  Stat.  292.  California,  Act  of  April  4,  1870, 
Laws,  p.  883.  Missouri,  Laws  of  1869,  p.  214,  Concurrent  Resolution. 
Texas  was  at  this  time  under  military  government.  Texas  &  Pacific 
R.  R.  Co.,  organized  by  Act  of  Congress,  March  3,  1871,  16  Stat.  573, 
May  2,  1872,  17  Stat.  59.  It  was  planned  to  extend  this  road  into  two 
States,  California  and  Texas.  These  States  consented  to  construction. 
California  by  previous  general  Act  of  1852,  Laws,  Ch.  77,  p.  150,  and  later 
by  Act  of  March  16,  1874,  Laws,  p.  370.  Texas  consented  by  Act  of  May  2, 
1873,  Laws,  318.  The  Central  Pacific  Ry.  Co.  was  a  State  corporation, 
authorized  by  the  Act  of  Congress  of  July  1,  1862,  12  Stat.  489,  494,  to  con- 
struct its  line  through  the  territory  until  it  should  meet  the  Union  Pacific, 
which  it  did  at  Ogden. 

1  Stockton  v.  Baltimore  &  N.  Y.  R.  R.  Co.,  32  Fed.  9.  ^ 

2  Luxton  v.  North  River  Bridge  Co.,  153  U.  S.  525.       ^ 


154  THE   FEDERAL  POWER   OVER 

the  carrier  are  to  the  State  in  which  it  operates,  and  that 
Congress  is  concerned  only  in  the  exercise  of  one  function, 
and  with  the  carrier  because  of,  and  to  the  extent  of  this 
function.  In  any  other  aspect  the  double  relations  of 
interstate  carriers,  to  the  States  on  the  one  hand,  and  to 
Congress  on  the  other,  is  unintelligible.  The  Texas  & 
Pacific  Railway  Company,  for  example,  though  char- 
tered by  Congress  as  an  interstate  road  with  the  sanction 
of  the  State  of  Texas,  was  constructed  between  points 
in  Texas  only.  Even  advocates  of  the  extension  of 
Federal  power  do  not  yet  claim  that  Congress  may  au- 
thorize the  building  of  such  a  road,  and  yet  in  fact  the 
relation  which  the  Texas  &  Pacific  sustains  to  the  State 
of  Texas,  is  not  different  from  the  relation  which  every 
carrier  sustains  to  the  communities  in  which  it  operates. 
The  function  of  interstate  transportation  is  the  same 
in  all  the  States.  Extension  of  Federal  power,  then, 
means  the  assumption  of  those  direct  and  primary  rela- 
tions to  the  carrier  itself,  outside  of  and  beyond  this 
function,  which  hitherto  have  belonged  to  the  States 
alone. 

Incorporation  within  the  territories.  Over  Federal 
territories,  including  the  District  of  Columbia,  Congress 
has  jurisdiction  in  all  cases  whatever.  Under  its  munic- 
ipal jurisdiction  of  this  nature,  it  has  organized  corpo- 
rations of  every  description,  but  it  has  never  chartered 
under  national  powers  a  mercantile  corporation,  and 
when  a  corporation  created  in  1866,  by  statute  enacted 
under  local  powers  but  in  general  terms,  attempted 
to  establishes  principal  office  outside  the  District  of 


CARRIERS  AND   CORPORATIONS  155 

Columbia,  its  action  in  this  respect  was  repudiated  by 
Congress.1 

In  the  foregoing  history  is  to  be  found  the  extent,  and 
the  limitations,  upon  the  Federal  power  of  incorporation. 
The  authority  to  charter  mercantile  companies  to  engage 
in  commerce  among  the  States,  is  a  power  which  was  not 
granted  by  the  Constitution,  which  Congress  has  never 
claimed,  and  which  finds  no  support  in  constitutional 
history.  If  the  general  phrases  of  the  Constitution  are 
not  thus  interpreted  "and  powers  so  extensive  and 
important"  as  the  organization  of  corporations  "are 
derived  from  them,  it  would  be  ridiculous  to  consider  the 
jurisdiction  of  Congress  restricted."  2 

1  Act  of  April  22,  1870,  16  Stat.  93,  Cong.  Globe,  41st  Cong.,  2d  Sess., 
p.  1028. 

2Burwell,  in  House  of  Representatives,  Jan.  16,  1811.  Annals  nth 
Cong.,  3d  Sess.,  581. 


156  THE   FEDERAL  POWER   OVER 


CHAPTER    VII 

THE  ANTI-TRUST  ACT 

The  Federal  Anti-trust  Act  was  formed  under  influ- 
ences tending  strongly  in  opposite  directions  —  the 
desire  to  afford  relief  for  a  condition  which  seemed  to 
threaten  a  great  public  mischief,  and  the  constitutional 
limitations,  which  seemed  to  make  effectual  Federal 
legislation  upon  the  subject  impossible. 

The  mischief  to  be  remedied.  Many  charges  are  made 
against  great  corporations,  but  the  source  of  the  general 
antagonism,  the  feature  which  excites  popular  apprehen- 
sion, is  their  tendency  toward  monopoly.  The  danger 
of  this  tendency,  and  the  obligation  of  government  to 
provide  a  remedy,  is  stated  in  emphatic  terms. 

"Our  government  springs  from  and  was  made  for  the  people  — 
not  the  people  for  the  Government.  To  them  it  owes  allegiance ; 
from  them  it  must  derive  its  courage,  strength,  and  wisdom.  But 
while  the  Government  is  thus  bound  to  defer  to  the  people,  from 
whom  it  derives  its  existence,  it  should,  from  the  very  consideration 
of  its  origin,  be  strong  in  its  power  of  resistance  to  the  establish- 
ment of  inequalities.  Monopolies,  perpetuities,  and  class  legisla- 
tion are  contrary  to  the  genius  of  free  government,  and  ought  not  to 
be  allowed.  Here  there  is  no  room  for  favored  classes  nor  monop- 
olies ;  the  principle  of  our  Government  is  that  of  equal  laws  and 
freedom  of  industry.  Wherever  monopoly  attains  a  foothold,  it 
is  sure  to  be  a  source  of  danger,  discord,  and  trouble."  ' 

1  First  Annual  Message  of  President  Johnson.  As  to  authorship  of  this 
message,  see  article  in  11  American  Historical  Review,  574;   id.  951. 


CARRIERS   AND   CORPORATIONS  157 

Most  persons,  in  viewing  commercial  affairs  from  the 
standpoint  of  complete  individualism,  would  probably 
agree  with  Harrington  that  "  equality  of  estates  causes 
equality  of  power,  and  equality  of  power  is  the  liberty, 
not  only  of  the  commonwealth,  but  of  every  man,"1 
or  in  the  briefer  phrase,  which  Algernon  Sidney  suggests, 
that  equality  is  part  of  liberty.  A  reasonable  degree  of 
equality,  both  of  power  and  of  right,  seems  from  such  a 
standpoint  to  be  part  of  safety,  and  in  this  country, 
until  very  recent  times,  has  existed.  Nature  has  so 
limited  the  life  and  strength  of  every  individual,  that 
while  natural  conditions  continue,  great  inequalities 
are  not  likely  to  arise  nor  long  to  endure.  A  man's 
life  ends  and  in  time,  under  the  legal  rules  which  forbid 
perpetuities  and  trusts  for  accumulation,  his  property  is 
divided. 

By  the  organization  of  corporations,  great  institutions 
are  created  which  are  not  subject  to  these  laws.  A 
corporation  is  itself  a  perpetuity,  either  by  charter  or  by 
the  facility  of  renewal.  Officers  and  directors  pass, 
individual  stockholdings  are  divided,  but  the  corpora- 
tion continues,  and  its  power  of  acquisition  is  unre- 
stricted. The  laws  which  formerly  secured  equal  con- 
ditions among  men  are  still  in  force,  but  that  which 
they  forbid  is  now  permitted  if  effected  by  other  methods. 
Property  may  now  be  held  and  accumulated  indefinitely, 
if  this  be  accomplished  in  corporate  form. 

It  is  clear  that  the  old  laws  could  not  forever  continue. 
The  inventions  of  steam  and  electricity  demand  great 
agencies,  and  with  the  growth  of  centres  of  population 

1  Oceana  (Routledge  &  Sons),  p.  27. 


158  THE   FEDERAL   POWER   OVER 

the  demand  increases  for  larger,  still  larger,  and  cheaper 
supply.  Permanent  organizations  have  become  neces- 
sary to  furnish  permanent  means  of  supply  on  a  great 
scale.  Railroads,  steamships,  factories,  mines,  must 
do  vastly  more  and  better  work  than  was  possible  un- 
der the  old  system,  and  must  take  advantage  of  every 
economy  which  great  organization  makes  possible. 
Society  has  developed  beyond  the  point  where  its 
needs  can  be  satisfied  by  individual  exertions,  —  in 
other  words,  beyond  the  old  standards  of  commercial 
equality. 

Changes,  such  as  these,  owe  but  little  to  the  con- 
scious volition  and  purpose  of  the  race.  They  are  more 
like  the  changes  made  by  great  laws  of  evolution,  be- 
yond human  control,  partly  even  beyond  observation; 
bringing  many  ameliorations,  but  bringing  also  much 
which  is  welcomed  by  none,  limitations  upon  individual 
initiative,  and  personal  dependence  upon  the  community 
in  place  of  personal  freedom.  The  truth  of  Harrington's 
remark  that  equality  of  estates  is  the  liberty  of  every 
man,  is  now  in  a  qualified  sense  a  matter  of  common 
experience,  but  it  means  no  more  than  that  under  pres- 
ent conditions  much  may  be  done  by  combination  which 
individuals  could  not  do  at  all,  or  could  not  do  as  well. 
From  these  fields  of  industry  individuals  are  excluded, 
—  not  by  law,  or  by  restraint  upon  their  trade,  but  by 
the  inefficiency  inherent  in  the  method. 

Individuals  are  now,  as  they  have  been,  equal  before 
the  law.  Competition  is  what  it  has  been.  There  is  no 
relaxation  in  the  rules  which  forbid  restraint  of  trade. 
Every  person  may  engage  in  trade  as  he  desires,  and 


CARRIERS  AND   CORPORATIONS  159 

compete  as  he  can.  That  his  ability  is  limited  only  by 
his  capacity,  and  by  the  extent  of  his  resources,  shows 
his  complete  commercial  freedom  to  overcome  the  com- 
petition of  those  who  are  weaker,  and  his  danger  before 
those  who  are  stronger.  It  is  mere  confusion  to  define 
restraints  of  trade  in  terms  of  power,  as  the  inability 
to  compete  successfully,  or  to  attempt  to  apply  the  law 
which  forbids  restraints  so  as,  if  possible,  to  destroy  by 
this  provision  the  inequalities  which  other  provisions 
create.  Society  has,  for  its  own  needs,  created  great  or- 
ganizations beyond  any  individual  competition.  This 
is  the  new  feature  of  present  conditions. 

For  this  but  one  remedy  is  possible,  if  indeed  it  be 
intended,  as  has  been  proposed,  that  government  shall 
"deal  beforehand  with  causes,  not  merely  afterwards 
with  their  effects."  *  Inequality  can  be  cured  only  by 
restoring  equality,  that  is,  since  legislation  cannot 
strengthen  the  weak,  the  strong  must  be  reduced,  the 
economies  which  come  from  consolidation  must  be  done 
away  with,  in  short,  the  amount  of  property  which  a 
corporation  may  hold  must  be  limited.  Such  legislation 
as  this,  which  would  measure  economic  progress  by  the 
abilities  of  the  weak,  finds  few  advocates.  "The  evils 
of  combination,"  Senator  Stewart  said,  "of  course  are 
very  great,  but  the  question  is,  —  do  they  not  grow  out 
of  civilization  itself,  the  foundation  of  which  is  or- 
ganization?" 2 

For  this  reason  the  effort  has  been  made  to  seek  some 
other  point  to  which  legislation  may  be  directed,  as  has 

1  Annual  Report  of  James  R.  Garfield,  Commissioner  of  Corporations, 
Dec.  1,  1905.  2  Cong.  Rec,  Vol.  21,  p.  2566. 


160  THE   FEDERAL  POWER  OVER 

been  said  to  draw  "the  line  against  misconduct,  not 
against  wealth."  x 

It  is  evident,  however,  that  those  who  believe  monopoly 
dangerous,  do  not  object  to  misconduct  alone,  but  to 
monopoly  itself.  This  objection  is  not  satisfied  by 
laws  forbidding  over-capitalization,  requiring  public- 
ity of  operation  and  accounts,  or  preventing  frauds. 
These  are  not  the  evils  of  monopoly,  and  are  "in 
no  way  connected  with  restriction  of  competition."  2 
The  charge  against  large  corporations  is  that,  "by 
the  use  of  this  organized  force  of  wealth  .  .  .  the  small 
men  engaged  in  competition  .  .  .  are  crushed  out,  and 
that  is  the  great  evil  at  which  all  this  legislation  ought  to 
be  directed."  3 

It  has  been  suggested  that  this  could  be  remedied  by 
laws  regulating  competition,  and  forbidding  such  as  has 
been  termed  "predatory."  An  attempt  of  this  nature 
was  made  in  Rice  v.  Standard  Oil  Company,4  where  it 
was  sought  to  found  liability  upon  the  assertion  that 
defendants  had  sold  goods  to  plaintiff's  customers  at  a 
loss,  for  the  purpose  of  diverting  to  themselves  trade 
which  had  gone  to  him.  The  methods  of  competition 
are  the  same,  however,  whether  conducted  by  small  or 


3  President  Roosevelt,  Message  to  Congress,  1903,  58th  Cong.,  2d  Sess. 

2  Ibid.  1905,  59th  Cong.,  1st  Sess.  Cong.  Rec,  Vol.  40,  Part  I,  p.  92. 
"  Over-capitalization  is  an  evil  peculiarly  within  the  control  of  State  govern- 
ments."    Speech  of  Secretary  Root  at  Utica,  Nov.  1,  1906. 

3  Senator  George,  April  8,  1890,  Cong.  Rec,  Vol.  21,  p.  3147:  "It  is  the 
combination  of  these  large  and  powerful  corporations,  covering  vast  sections 
of  territory  and  influencing  trade  throughout  the  whole  extent  thereof,  and 
acting  as  one  body  in  all  the  matters  over  which  the  combination  extends, 
that  constitutes  the  alleged  evil."  Mr.  Justice  Peckham  in  United  States  v. 
Traffic  Ass'n,  171  U.  S.  505,  571. 

4  134  Fed.  464. 


CARRIERS  AND   CORPORATIONS  161 

great.1  The  question  is  not  of  methods,  but  of  the  power 
of  competition.  When  a  dealer  of  large  means,  able 
to  take  advantage  of  economies  which  a  great  business 
makes  possible,  and  having  also  the  further  advantage  of 
a  wide  market,  competes  with  a  dealer  of  small  means 
dependent  upon  comparatively  expensive  methods  and  a 
limited  market,  the  small  competitor  reaches  the  end  of 
its  resources  first.  This  cannot  be  changed  by  statutes 
regulating  competition.2 

Trust  regulation  could  be  accomplished,  then,  — 
if  we  could  return  to  the  conditions  of  a  hundred  and 
fifty  years  ago,  —  by  abolishing  corporations,  leaving 
individuals  to  the  natural  laws  which  check  excessive 
inequalities;  or  since  this  is  impossible,  great  inequal- 
ity may  be  prevented  by  limitation  upon  the  amount  of 
property  a  corporation  may  hold. 

The  popular  movement  for  the  regulation  of  corpora- 
tions has,  however,  as  yet,  no  well  defined  end,  but  seeks 
at  the  same  time  to  accomplish  inconsistent  results; 
to  destroy  monopoly  without  impairing  the  efficiency 
of  great  corporations ;  to  enforce  competition,  but  to 
forbid  its  consequences,  in  substance  to  ignore  the  rule, 
stated  by  Mr.  Brooks  Adams,  that  consolidation  is  the 
result  alike  of  competition  and  of  combination.3 

Legislative  history  of  the  statute.  The  place  in 
this  movement  at  first  assigned  to  the  Federal  statute 

1  "The  Ethics  of  Trust  Competition,"  by  Mr.  G.  H.  Montague,  Atlantic 
Monthly,  Vol.  95,  p.  414,  March,  1905. 

2  Mr.  Bryan  defines  a  trust  as  "a  corporation  that  controls  so  large  a 
proportion  of  the  total  product  as  to  be  able  to  effectively  defeat  competition 
and  fix  the  terms  and  conditions  of  sale."  Speech  at  Madison  Square 
Garden,  Aug.  30,  1906. 

3  "Centralization  and  the  Law"  (Little,  Brown   &  Co.,  1906),  Ch.  2. 


162  THE   FEDERAL  POWER   OVER 

was  necessarily  of  small  importance.  Congress  was 
without  authority  to  control  or  modify  State  laws  under 
which  combinations  are  formed.  Theories  of  constitu- 
tional construction  had  not  yet  developed,  whereby,  leav- 
ing these  laws  in  full  operation,  an  antagonism  has  been 
erected  between  State  and  Federal  laws,  empowering 
Federal  officers  laboriously  to  destroy  organizations 
which  the  States  lawfully  authorize. 

When  the  Sherman  Act  was  before  Congress  the  rule 
was  undoubted  that  each  State  governed  the  corpora- 
tions formed  under  its  laws,  determining  the  amount  of 
capitalization  which  should  be  permitted,  the  powers 
which  might  be  exercised,  and  fixing  the  terms  for 
admission  of  corporations  formed  elsewhere.  In  all 
cases  the  contracts  to  be  made  were  matters  with  which 
Congress  had  no  concern  save  to  the  extent  that,  under 
the  commerce  clause,  the  Constitution  established  free 
trade  among  the  States. 

The  explanation  is,  that  during  the  first  century  after 
the  adoption  of  the  Constitution,  Federal  powers  over 
commerce,  except  in  relation  to  carriers,  had  not  greatly 
enlarged.  When  the  Sherman  Act  was  debated  in  1890 
the  commerce  clause  still  retained  something  of  the 
meaning  with  which  it  was  drawn,  and  Congress  in 
framing  its  statute  manifested  no  desire  to  go  beyond  that 
meaning.  "I  believe,"  said  Senator  Edmunds,  "that 
the  safety  of  the  Republic  as  a  nation,  one  people,  one 
hope,  one  destiny,  depends  more  largely  upon  the 
preservation  of  what  are  called  the  rights  of  the  States, 
than  upon  any  other  one  thing."  * 

1  Speech  in  Senate,  March  27,  1890,  Cong.  Rec,  Vol.  21,  p.  2727. 


CARRIERS  AND   CORPORATIONS  163 

Federal  regulation  of  corporations  then,  at  a  time 
when  Congress,  having  no  constitutional  power  over  the 
subject,  had  no  desire  to  pass  beyond  constitutional 
limitations,  presented  a  difficult  situation  for  advocates 
of  centralization. 

It  is  very  clear,  Senator  Sherman  said,  that  Congress 
has  no  power  to  control  commercial  combinations  unless 
it  be  derived,  not  from  the  power  to  regulate  com- 
merce, but  from  the  power  to  levy  taxes.1  This  power, 
he  said,  Congress  may  exercise  in  its  own  discretion, 
both  as  to  the  objects  and  rates  of  taxation.  "Some 
.  .  .  taxes  are  levied  for  the  direct  and  some  for  the 
incidental  encouragement  and  increase  of  home  indus- 
tries. The  people  pay  high  taxes  on  the  foreign 
article  to  induce  competition  at  home,  in  the  hope  that 
the  price  may  be  reduced  by  competition,  and  with  the 
benefit  of  diversifying  our  industries  and  increasing 
the  common  wealth.  Suppose  one  of  these  combinations 
should  unite  all,  or  nearly  all,  the  domestic  producers 
of  an  article  of  prime  necessity  with  a  view  to  prevent 
competition  and  to  keep  the  price  up  to  the  foreign  cost 
and  duty  added,  would  not  this  be  in  restraint  of  trade 
and  commerce  and  affect  injuriously  the  operation  of 
our  revenue  laws?"  2 

In  accordance  with  these  views,  in  1888  and  again  in 
1889,  Senator  Sherman  introduced  a  bill  to  forbid  com- 
binations tending  to  prevent  competition  in  the  impor- 
tation of  articles  from  abroad,  or  in  the  production  of 
domestic  articles  competing  with  imported  articles. 
Congress,  he  said,  "can  go  no  farther  than  that.     It  is 

1  Cong.  Rec,  Vol.  19,  p.  7513.  2  Ibid.  Vol.  21,  p.  2462. 


164  THE   FEDERAL   POWER   OVER 

not  claimed  by  anybody  it  can.  So  that  covers  the 
whole  thing."  * 

It  soon  became  apparent,  however,  that  the  revenue 
power  afforded  no  support  for  a  bill  which  assumed 
complete  jurisdiction  over  the  commercial  competition 
of  the  country.  "If  Congress  could  exercise  such  a 
power  as  this,"  Senator  George  said,  "nothing  would 
remain  to  the  States  of  their  ancient  and  undoubted 
jurisdiction  over  their  internal  affairs."  2  "I  do  not 
think  the  courts  would  give  effect  to  such  a  provision," 
Senator  Reagan  said,  "nor  do  I  think  it  would  be  safe 
for  the  Senate  to  attempt  to  do  what  it  appears  to  me 
is  clearly  not  within  the  power  of  Congress."  3 

The  attempt  to  support  the  bill  as  an  exercise  of  the 
revenue  power,  was  therefore  abandoned  by  common 
consent,  and  it  was  left  to  stand,  if  at  all,  as  an  exercise 
of  the  power  to  regulate  commerce,  —  a  basis  of  juris- 
diction which  had  already  been  considered,  and  passed 
over,  as  inadequate  to  support  any  effective  Federal 
legislation. 

In  this  aspect  it  was  necessary  to  restrict  the  opera- 
tion of  the  bill  to  agreements  and  combinations  forming 
part  of  interstate  or  international  commerce,  —  that  is, 
for  example,  to  agreements  for  interstate  transportation, 
or  to  contracts  for  the  sale  and  delivery  of  goods  across 
State  lines.  Few  combinations  relate  to  these  contracts, 
however,  and  therefore,  in  the  effort  to  make  the  statute 
broad  enough  to  be  effective,  it  was  proposed  to  forbid 
combinations  in  restraint  of  competition  in  the  produc- 

1  Cong.  Rec,  Vol.  20,  p.  1167.  2  Ibid.  Vol.  21,  p.  1770. 

3  Ibid.  Vol.  20,  p.  1 169. 


CARRIERS  AND   CORPORATIONS  165 

tion,  manufacture,  or  sale  of  goods,  "that  in  due  course 
of  trade  shall  be  transported  from  one  State"  to  an- 
other. A  statute  of  this  nature  could  be  sustained  only 
on  the  ground  of  an  anticipating  and  continuing  juris- 
diction over  every  article,  which  at  any  period  in  its 
history  —  from  production  commenced  to  consumption 
completed  —  had  ever  crossed,  or  would  cross,  State 
lines,  and  over  every  buyer  and  every  seller  of  such 
article.  No  jurisdiction  of  this  sort  exists.  The 
agreements  which  the  bill  forbade  were  within  the  or- 
dinary State  jurisdiction.  These,  it  was  proposed  to 
subject  to  Federal  control  by  reason  of  an  act  which 
might  or  might  not  take  place,  but  if  at  all,  would  be  done 
after  the  agreement  had  been  made. 

"The  trouble  about  this  bill,"  Senator  George  said, 
"is  that  it  is  an  attempt  to  do  the  impossible.  It  is  an 
attempt  to  draw  within  the  commercial  power  of  Con- 
gress jurisdiction  over  this  subject  by  the  provision  about 
transportation.     This  is  the  trouble."  1 

No  attempt  was  made  to  answer  these  objections  and 
as  Senator  Morgan  said,  the  bill  "went  to  pieces."  2 

Following  this  argument  the  bill  was  redrafted  and 
a  new  theory  of  Federal  jurisdiction  was  proposed. 
As  now  advanced,  the  bill  forbade  combinations  or 
arrangements  tending  to  prevent  free  competition  be- 
tween citizens  of  different  States,  or  of  the  United  States 
and  a  foreign  country.  The  fact,  said  Senator  Piatt 
of  Connecticut,  that  the  bill  is  confined  to  arrangements 
between  persons  or  corporations  of  different  citizen- 
ship, "is  an  admission  on  the  face  of  it,  that  the  author 

1  Cong.  Rec,  Vol.  21,  p.  1460.  2  Ibid.  p.  2608. 


166  THE  FEDERAL  POWER  OVER 

of  the  bill  .  .  .  admits  his  inability  to  do  anything  else 
in  this  direction."  * 

The  new  source  of  authority  was  defended  by  Senator 
Sherman  on  the  ground  that  the  Constitution  has  not 
only  given  to  the  Federal  courts  jurisdiction  of  certain 
cases  arising  under  its  provisions,  but  has  also  given  to 
those  courts  a  broad  jurisdiction  dependent  upon  citizen- 
ship. "This  jurisdiction  embraces  the  whole  field  of 
the  common  law  and  of  commercial  law,  especially  of 
the  law  of  contracts,  in  all  cases  where  the  United  States 
is  a  party,  and  in  all  cases  between  citizens  of  different 
States.  The  jurisdiction  is  as  broad  as  the  earth,  except 
only  it  does  not  extend  to  controversies  within  a  State 
between  citizens  of  a  State.  All  the  combinations  at 
which  this  bill  aims,  are  combinations  embracing  per- 
sons and  corporations  of  different  States."  2 

This,  as  Senator  Vest  showed,  is  but  to  confuse  the 
jurisdiction  of  the  courts  with  the  legislative  jurisdic- 
tion of  Congress.  Federal  courts  enforce  State  law  in 
fields  beyond  congressional  control.3 

"I  suppose, "  Senator  Hoar  said,  that  the  provision  confining  the 
operation  of  the  bill  to  combinations  between  citizens  of  different 
States,  "was  prepared  with  some  idea  .  .  .  that  contracts  between 
citizens  of  .  .  .  different  States  were  necessarily  commerce  be- 
tween those  States,  and  that  that  was  essential  to  bring  the  pro- 
posed statute  within  the  constitutional  power  of  Congress.  .  .  . 
But  that,  as  it  seems  to  me,  is  very  clearly  a  mistake.  It  is  not 
commerce  between  the  States  for  a  citizen  of  Massachusetts  to  go 
into  Ohio  and  buy  a  farm  there,  or  buy  a  barrel  of  flour  there,  or 
make  an  unlawful  contract  there.    The  bill  must  stand,  if  at  all, 

1  Cong.  Rec,  Vol.  21,  p.  2607.  2  Ibid.  p.  2460. 

3  Ibid.  pp.  2464-2466. 


CARRIERS  AND   CORPORATIONS  167 

upon  the  fact  that  it  is  a  bill  to  protect  what  is  described  alone,  and 
that  is  the  importation,  transportation  and  sale  of  articles  im- 
ported into  the  United  States  or  transported  from  one  State  to 
another.  .  .  ." x 

In  accordance  with  these  views  the  clause  relating  to 
diversity  of  citizenship  was  stricken  out,  and  the  bill 
once  more  rested  upon  the  narrow  power  to  regulate 
commerce. 

As  thus  framed,  the  extent  of  its  operation  was  defined 
in  the  course  of  the  debates.  "Suppose,"  Senator 
Piatt  of  Connecticut  asked,  "that  there  was  a  combina- 
tion existing  in  Chicago  to  put  up  the  price  of  wheat. 
.  .  ."  Could  that  combination  "be  reached  under  the 
power  of  Congress  to  deal  with  commerce  between  the 
States  ?"  To  which  Senator  Hoar  answered,  that  unless 
it  can  be  shown  that  the  combination  is  made  to  affect 
the  price  to  be  paid  for  delivery  in  another  State,  the 
combination  is  beyond  Federal  power.  It  is  difficult, 
then,  said  Senator  Piatt,  to  see  that  anything  could  be 
reached.2 

The  statute,  in  other  words,  standing  alone,  was  as 
the  Judiciary  Committee  of  the  House  reported  "of 
little  value."3  It  could  be  effective  only  in  supple- 
menting State  laws,  —  in  preventing  the  evasion  of 
State  statutes  by  the  insertion  in  contracts  otherwise 
unlawful,  of  provisions  for  interstate  delivery.4  The 
attempt  to  draw  commercial  combinations  within  Fed- 
eral power  "by  the  provision  about  transportation" 

1  Cong.  Rec,  Vol.  21,  p.  2567.  2  Ibid.  p.  2568. 

3  House  Report  No.  1707,  51st  Cong.,  1st  Sess.,  April  25,  1890. 
*  See,  for  example,  Hadley  Dean  Plate  Glass  Co.  v.  Highland  Glass  Co., 
143  Fed.  242. 


168  THE   FEDERAL   POWER  OVER 

was  abandoned  and  the  general  subject  was  left  to  the 
States.1 

The  line  between  State  and  Federal  authority.     The 

nature  and  extent  of  Federal  powers  over  commerce 
among  the  States,  has  been  defined  in  many  cases. 
As  has  been  shown  in  previous  chapters,  the  jurisdiction 
has  been  enlarged,  partly  by  application  of  old  rules  to 
new  conditions,  partly  by  mistaken  conceptions  of  early 
decisions,  and  partly  by  necessity,  as  in  the  adoption  by 
the  decision  of  Crandall  v.  Nevada  2  of  new  relations 
among  the  States  which  the  Civil  War  established. 
Notwithstanding  this  development,  there  has,  since  the 

1  "I  should  be  very  glad  if  there  were  some  way  by  which  the  evils  aimed 
at  .  .  .  could  be  effectually  remedied.  .  .  .  But  ...  I  am  compelled  to 
recognize  the  fact  that  there  are  many  things  .  .  .  which  the  Government  of 
the  United  States,  as  a  government  of  limited  and  special  powers,  is  not  com- 
petent to  accomplish.  I  do  not  think  it  wise  statesmanship  that  we  should 
burn  the  house  in  order  to  get  rid  of  the  rats,  nor  that  we  should  overthrow 
our  constitutional  form  of  government  in  order  to  get  rid  of  some  of  the  evils 
of  society.  We  are  not  altogether  without  remedy.  The  States  have  the 
power  to  deal  .  .  .  with  all  phases  of"  the  subject.  Speech  of  Senator 
Gray,  March  26,  1890,  Cong.  Rec,  Vol.  21,  p.  2657.  The  House  Com- 
mittee on  Judiciary  reported  on  the  bill  April  25,  1890.  Among  other  things 
it  said :  — 

"It  will  be  observed  that  the  provisions  of  the  bill  are  carefully  confined 
to  such  subjects  of  legislation  as  are  clearly  within  the  legislative  authority 
of  Congress. 

"  No  attempt  is  made  to  invade  the  legislative  authority  of  the  several 
States,  or  even  to  occupy  doubtful  grounds.  No  system  of  law  can  be  devised 
by  Congress  alone  which  would  effectually  protect  the  people  of  the  United 
States  against  the  evils  and  oppression  of  trusts  and  monopolies.  Congress 
has  no  authority  to  deal,  generally,  with  the  subject  within  the  States,  and 
the  States  have  no  authority  to  legislate  in  respect  of  commerce  between  the 
several  States  or  with  foreign  nations. 

"  It  follows,  therefore,  that  the  legislative  authority  of  Congress,  and  that 
of  the  several  States  must  be  exerted  to  secure  the  suppression  of  restraints 
upon  trade  and  monopolies. 

"  Whatever  legislation  Congress  may  enact  on  this  subject,  within  the  limits 
of  its  authority,  will  prove  of  little  value,  unless  the  States  shall  supplement 
it  by  such  auxiliary  and  proper  legislation  as  may  be  within  their  legislative 
authority." 

House  Report  No.  1707,  51st  Cong.,  1st  Sess. 

2  6  Wall.  35. 


CARRIERS  AND   CORPORATIONS  169 

Civil  War,  been  a  substantial  agreement  upon  the  gen- 
eral definition  of  the  Federal  jurisdiction. 

Interstate  commerce,  in  the  constitutional  sense,  is 
characterized  by  transportation  which  extends  beyond 
the  limits  of  a  single  State.  It  consists  in  the  embark- 
ation, transportation  and  discharge  of  passengers,  the 
receipt,  carriage  and  delivery  of  goods,  and  in  negotia- 
tions looking  toward,  or  constituting,  contracts  having 
relation  to  such  transportation ;  that  is,  contracts  by  the 
seller  to  deliver  goods  in  another  State,  or  contracts 
for  the  sale  of  goods  after  transportation  while  still  in 
first  hands  and  original  packages. 

The  Federal  jurisdiction,  founded,  as  it  is,  upon  trans- 
portation across  State  lines,  is  necessarily  narrow.  It  is 
not  a  jurisdiction  over  persons  engaged  in  commerce, 
but  over  that  commerce  which  falls  within  the  consti- 
tutional definition.  The  power  of  Congress  is  founded 
upon  the  fact  of  interstate  transportation,  or  negotiation 
for  interstate  transportation;  it  exists  whenever  this 
fact  exists,  and  only  then.  It  is  jurisdiction  over  an  act, 
and  no  matter  how  often  an  individual  may  perform  the 
act,  it  never  becomes  a  personal  jurisdiction,  but  at  the 
most  amounts  to  control  of  frequently  repeated  acts. 

The  fact  then  that  persons  associated  as  partners,  or 
as  members  of  a  corporation,  within  a  State  may  ship 
goods  across  State  lines  does  not  bring  within  Federal 
jurisdiction  the  articles  of  co-partnership  or  of  incorpora- 
tion, but  only  the  acts  which  directly  and  immediately 
centre  about  interstate  transportation.  The  fact  that 
goods  may  ultimately  go  across  State  lines,  or  even  that 
they  are  produced  and  marketed  with  this  destination 


l7o  THE   FEDERAL  POWER  OVER 

in  view,  does  not  bring  them  within  control  of  Congress. 
"A  pretension  as  far  reaching  as  this,  would  extend  to 
contracts  between  citizen  and  citizen  of  the  same 
State,  would  control  the  pursuits  of  the  planter,  the 
grazier,  the  manufacturer,  the  mechanic,  the  immense 
operations  of  the  collieries  and  mines  and  furnaces  of 
the  country;  for  there  is  not  one  of  these  avocations, 
the  results  of  which  may  not  become  the  subjects  of 
foreign  commerce  and  be  borne  either  by  turnpikes, 
canals  or  railroads,  from  point  to  point  within  the  several 
States,  towards  an  ultimate  destination,  like  the  one 
above  mentioned."  1 

With  reference  to  goods,  the  commerce  which  is 
within  Federal  control,  begins  with  the  actual  move- 
ment from  State  to  State,  or  with  delivery  to  the  carrier 
for  transportation.  It  ends,  when  the  goods  are 
merged  in  the  general  mass  of  property  in  the  State 
of  destination,  a  merger,  it  has  been  determined,  which 
for  practical  purposes  is  effected  when  the  goods  pass 
from  first  hands,  or  when,  without  sale,  the  original 
package  is  broken.  With  reference  to  persons  partici- 
pating in  these  operations,  commerce  begins  with  the 
commencement  of  negotiations  for  sale  or  transportation 
and  ends  with  performance.  Federal  power  extends 
also  to  protect  goods  and  persons  from  discrimination 
on  account  of  foreign  origin,  and  includes  a  broad 
control  over  the  coasting  trade.  The  extent  of  Federal 
jurisdiction  varies  somewhat,  according  to  the  nature 
of  the  power  under  discussion.  To  take  a  familiar 
instance,   the   regulations   of   a    carrier    may   permit 

1  Veazie  v.  Moore,  14  How.  574;  Kidd  v.  Pearson,  128  U.  S.  1. 


CARRIERS  AND   CORPORATIONS  171 

goods,  which  have  been  received  for  through  transporta- 
tion, to  be  halted  within  a  State  for  local  purposes, — 
as  in  the  case  of  grain  which  is  milled  in  transit.  In 
this  case  the  grain  being  within  the  State  for  other 
purposes  than  transportation,  is  subject  to  State  tax- 
ation, although  so  far  as  concerns  the  carriers'  rates 
for  transportation  from  point  of  origin  to  ultimate 
destination,  the  Federal  jurisdiction  is  uninterrupted. 
So  the  line  which  marks  the  extent  of  Federal  power 
under  the  Anti-trust  Act,  may  not  at  all  points  be  iden- 
tical with  the  line  which  separates  State  and  Federal 
authority  in  cases  of  taxation  and  regulation  of  rates,  but 
the  principle  upon  which  the  distinction  rests  is  in  all 
cases  the  same,  —  that  Federal  power  relates  to  inter- 
state transportation,  and  is  limited  to  such  regulations 
as  will  prevent  burdens  upon  the  act  of  communication. 
Within  these  limits  the  whole  Federal  power  iscontained. 

It  is  obvious,  then,  that  the  line  between  State  and 
Federal  powers  with  reference  to  commerce  is  an 
arbitrary  one.  There  is  no  economic  or  commercial 
distinction  which  even  roughly  corresponds  with  State 
boundaries.  Commerce  is  a  whole,  and  a  power  to 
regulate  commerce,  if  complete  and  unlimited  by  an 
arbitrary  line  of  division,  must  extend  to  all  commerce 
wherever  conducted.  Such  a  power  Congress  does 
not  possess.  The  Constitution  in  fact  established  an 
arbitrary  limit  to  Federal  jurisdiction. 

A  distinction  of  this  nature,  however,  clear  as  it 
may  at  first  be  made,  is  difficult  to  observe.  Courts 
proceed  so  largely  by  logical  processes,  seeking  to 
create  a  consistent  and  harmonious  body  of  decisions, 


172  THE  FEDERAL  POWER   OVER 

that  an  arbitrary  distinction,  imdiscoverable  by  logic, 
inevitably  tends  to  blur. 

In  the  history  of  Federal  decisions  upon  the  commerce 
clause,  and  conspicuously  in  cases  arising  upon  the 
Sherman  Act,  this  tendency  shows  itself  with  increasing 
force  and  with  a  twofold  effect;  limiting  State  powers 
so  as  seriously  to  interfere  with  the  legislation  which 
most  effectively  can  remedy  commercial  evils,  and 
imposing  upon  the  Constitution  new  interpretations 
which  threaten  fundamental  alteration  in  our  system 
of  government. 

It  is  of  great  importance,  then,  that  State  jurisdiction 
over  corporations  should  be  understood ;  that  it  should 
be  known  that  there  is  no  practical  necessity  which 
compels  Congress  and  the  courts  to  supersede  this 
jurisdiction,  but  on  the  contrary  that,  so  far  as  concerns 
constitutional  law,  the  practical  difficulties  in  the  way 
of  corporate  control  result  from  recent  efforts  to  limit 
State  authority;  of  greatest  importance  is  it,  that  con- 
stitutional government  and  the  reign  of  law  should  be 
maintained,  and  that  the  great  tribunal,  which  has  been 
called  the  living  voice  of  the  Constitution,  should  not 
become  a  dependent  upon  the  popular  opinion  of  the 
day. 

That  State  jurisdiction  is  adequate  to  reach  the  com- 
mercial conditions  from  which  has  arisen  the  current 
demand  for  trust  legislation,  is  shown  by  the  fact  that 
these  conditions  have  been  brought  about  by  recent 
modification  of  State  laws. 

When  the  Constitution  was  adopted,  "  it  was 
accepted    as   a   matter   of   course    that    the    several 


CARRIERS  AND   CORPORATIONS  173 

States  were  the  proper  authorities  to  regulate,  so  far 
as  was  then  necessary,  the  comparatively  insignificant 
and  strictly  localized  corporate  bodies  of  the  day."  ! 

In  this  well-known  history  appears  a  limitation 
which  in  early  days  restricted  the  size  of  corporations. 
Corporate  bodies  at  that  time  were  "  strictly  local- 
ized " ;  that  is,  they  conducted  their  business  in  the 
State  of  incorporation.  Under  this  practice  no  great 
monopoly  can  arise,  for  its  two  essential  conditions  are 
absent. 

A  great  market  makes  a  great  business,  and  State 
laws  permit  great  aggregations  of  capital.  Both  con- 
ditions must  unite  to  make  a  great  corporation  pos- 
sible, and  both  are  within  the  power  of  each  State  to 
control  for  itself.  Inequality  among  competitors  may 
be  limited  directly,  by  restricting  the  amount  of  property 
which  a  corporation  may  hold,  or  the  limitation  may  be 
imposed  indirectly,  by  restricting  the  market  in  which  a 
corporation  may  deal.  Any  State  which  so  desires  may 
establish  its  conditions  of  competition  by  requiring  all 
who  conduct  business  in  corporate  form  within  its 
territory  to  organize  under  its  laws;  forbidding  its 
corporations  to  hold  stock  in  other  companies,  and  for- 
bidding foreign  companies  to  acquire  title  to  stock  of 
its  corporations.  An  individual  could  then  control  as 
many  State  corporations  as  his  means  permitted ;  but 
this  monopoly,  were  one  so  created,  would  not  be  per- 
manent, and  in  time  the  holdings  so  united  would  be 
divided. 

The   Federal   Constitution   does  not   prevent   State 

1  President  Roosevelt,  Message  to  Congress,  1901,  57th  Cong.,  1st  Sess. 


174  THE   FEDERAL  POWER  OVER 

legislation  of  this  character,  nor  interfere  effectually 
with  its  operation.  A  corporation  cannot  maintain  a 
monopoly  throughout  the  country  by  dealing  only  in 
original  packages. 

The  limitation  upon  the  size  of  corporations,  which 
thus  resulted  from  State  control,  seems  to  have  been 
understood  when  the  Constitution  was  formed.  In 
opposing  a  grant  to  Congress  of  power  to  create  cor- 
porations James  Winthrop  said :  — 

"We  find  hardly  a  country  in  Europe  which  has  not  felt  the  ill 
effects  of  such  a  power.  Holland  has  carried  the  exercise  of  it 
further  than  any  other  country  and  the  reason  why  that  country 
has  felt  less  evil  from  it  is  that  the  territory  is  very  small."  * 

The  size  of  the  market,  in  other  words,  determined  the 
size  of  competitors.  These  conditions  existed  also  in 
America  for  many  years  after  the  adoption  of  the  Con- 
stitution. The  territory  of  each  State  was  small,  and 
the  State  corporations  to  a  considerable  degree  confined 
to  that  territory. 

All  this  has  but  recently  been  altered  by  the  changes 
in  State  law  which  permit  incorporation  for  unlimited 
amounts,  which  have  abolished  the  rules  forbidding 
corporate  ownership  of  stock,  and  by  the  comity  under 
which  every  State  has  admitted  the  corporations  of  every 
other  State  and  country.  If  it  be  desired  to  undo  these 
changes,  they  can  be  abolished  as  they  were  made,  — ■ 
by  each  State  for  itself.  In  the  meanwhile  the  domestic 
policy  of  each  State,  toward  its  own  and  foreign  cor- 

1  Massachusetts  Gazette,  Dec.  14,  1787,  Ford,  Essays  on  the  Constitution, 
p.  70. 


CARRIERS  AND  CORPORATIONS  175 

porations,  is  in  any  event  beyond  Federal  jurisdiction. 
We  are  informed  that  "it  is  difficult  to  be  patient  with 
an  argument  that  such  matters  should  be  left  to  the 
States,"  1  but  this  is  beyond  question  the  constitutional 
rule,2  and  in  its  favor  it  may  be  said  that  under  the  lib- 
eral practice  of  the  States,  commercial  prosperity  for  all 
classes  has  reached  its  highest  point. 

In  fact,  limitation  upon  the  size  of  corporations  is  un- 
desirable, —  both  because  it  amounts  to  no  more  than 
the  substitution  of  many  local  monopolies  for  national 
monopolies,  without  the  advantages  which  come  from 
consolidation,  and  because,  notwithstanding  the  force 
of  theoretical  arguments  concerning  equality,  it  is 
evident  that  only  by  great  corporations  can  great 
business  be  done.  America  is  competing  for  the 
markets  of  the  world,  and  the  size  of  the  market  deter- 
mines the  size  of  the  competitors.  "The  same  busi- 
ness conditions  which  have  produced  the  great  aggrega- 
tions of  corporate  and  individual  wealth  have  made 
them  very  potent  factors  in  international  commercial 
competition.  Business  concerns  which  have  the 
largest  means  at  their  disposal,  and  are  managed  by  the 
ablest  men,  are  naturally  those  which  take  the  lead  in 
the  strife  for  commercial  supremacy  among  the  nations 
of  the  world.  America  has  only  just  begun  to  assume 
that  commanding  position  in  the  international  business 
world,  which  we  believe  will  more  and  more  be  hers. 
It  is  of  the  utmost  importance  that  this  position  be  not 
jeoparded,  especially  at  a  time  when  the  overflowing 

1  President  Roosevelt,  Message  to  Congress,  1904,  58th  Cong.,  3d  Sess. 

2  President  Roosevelt,  Message  to  Congress,  1901,  57th  Cong.,  1st  Sess. 


176  THE   FEDERAL  POWER  OVER 

abundance  of  our  own  natural  resources  and  the  skill, 
business  energy,  and  mechanical  aptitude  of  our  people 
make  foreign  markets  essential."  * 

The  Federal  statute,  then,  being  enacted  in  a  field 
which  the  States  alone  adequately  could  cover,  could 
be  of  value  only  in  supplementing  State  laws.  The  or- 
ganization and  administration  of  corporations  and  part- 
nerships ;  the  operations  of  production  and  the  control 
of  domestic  commerce  and  domestic  markets,  —  all 
these  matters  belong  to  the  States.  When  goods  pass 
from  the  domestic  market,  the  contracts  which  centre 
about  transportation,  as  this  expression  has  been  de- 
fined, belong  to  Federal  control,  and  to  these  contracts 
alone  the  Federal  statute  relates. 

The  combinations  over  which  Federal  power  extends 
are,  in  other  words,  of  the  following  classes :  — 

1.  Combinations  relating  to  the  act  of  transportation  across  State 

lines. 

2.  Combinations  relating  to  the  purchase  or  sale  of  goods  under 

contracts  providing  for  delivery  across  State  lines. 

3.  Combinations  relating  to  the  purchase  or  sale  of  goods  which 

have  been  transported  across  State  lines  and  are  held  in  first 
hands  and  original  packages. 

Other  combinations  of  the  nature  of  one  of  these 
three  classes,  such,  for  example,  as  a  conspiracy  to  destroy 
or  injure  imported  goods,  or  to  deny  public  access  to  the 
place  of  sale,  would  also  be  within  Federal  authority. 
Broadly  speaking,  however,  these  three  classes  define 
the  field  of  Federal  jurisdiction. 

1  President  Roosevelt,  Message  to  Congress,  1901,  57th  Cong.,  1st  Sess. 


CARRIERS  AND   CORPORATIONS  177 

Within  this  field  the  Federal  statute  enacts :  — 

1.  That  every  contract  or  combination  in  restraint  of  trade  or 

commerce  among  the  States,  &c,  is  illegal  and  that  the  par- 
ties to  such  a  contract  are  guilty  of  a  misdemeanor.  (First 
section.) 

2.  That  every  person  who  shall  monopolize  or  attempt  to  monopo- 

lize any  part  of  interstate  or  foreign  trade  is  guilty  of  a  mis- 
demeanor.    (Second  section.)1 

3.  That  violation  of  the  act  may  be  prevented  and  restrained  by 

proceedings  in  equity  under  the  direction  of  the  Attorney- 
General. 

4.  That  any  property  owned  under  any  contract  or  by  any  com- 

bination or  pursuant  to  any  conspiracy  mentioned  in  the  first 
section  "and  being  in  the  course  of  transportation  from  one 
State  to  another,  or  to  a  foreign  country"  shall  be  forfeited. 

5.  That  persons  injured  in  business  or  property  by  acts  in  violation 

of  the  statute  may  sue  and  recover  threefold  damages  and  an 
attorney's  fee. 

The  statute  was  framed  in  terms  which  were  well 
known  in  the  language  of  the  common  law  and  had  a 
settled  legal  significance.  Its  operation  was  confined 
to  a  jurisdiction  whose  limits  were  fixed  by  the  Con- 

1  The  first  two  sections  of  the  statute  read  as  follows :  — 

"Sec.  1.  Every  contract,  combination  in  the  form  of  trust  or  otherwise, 
or  conspiracy,  in  restraint  of  trade  or  commerce  among  the  several  States, 
or  with  foreign  nations,  is  hereby  declared  to  be  illegal.  Every  person  who 
shall  make  any  such  contract  or  engage  in  any  such  combination  or  con- 
spiracy, shall  be  deemed  guilty  of  a  misdemeanor,  and,  on  conviction  thereof, 
shall  be  punished  by  fine  not  exceeding  five  thousand  dollars,  or  by  imprison- 
ment not  exceeding  one  year,  or  by  both  said  punishments,  in  the  discretion 
of  the  court. 

"Sec.  2.  Every  person  who  shall  monopolize,  or  attempt  to  monopolize, 
or  combine  or  conspire  with  any  other  person  or  persons,  to  monopolize  any 
part  of  the  trade  or  commerce  among  the  several  States,  or  with  foreign  na- 
tions, shall  be  deemed  guilty  of  a  misdemeanor,  and,  on  conviction  thereof, 
shall  be  punished  by  fine  not  exceeding  five  thousand  dollars,  or  by  imprison- 
ment not  exceeding  one  year,  or  by  both  said  punishments,  in  the  discretion 
of  the  court." 

See  U.  S.  Stats.,  Vol.  26,  p.  209. 


178  THE   FEDERAL  POWER   OVER 

stitution  and  denned  by  numerous  decisions.  There 
seemed  to  be  little  room  for  doubt  as  to  its  meaning,  or 
for  speculation  as  to  its  effect. 

At  common  law,  as  understood  when  the  Federal 
statute  was  passed,  the  term  tl  contract  or  combination 
in  restraint  of  trade"  referred  to  undertakings,  whereby 
a  person  bound  himself  to  refrain  from  the  exercise  of 
a  trade  or  occupation.  Restrictions  of  this  nature  are 
common  in  articles  of  copartnership,  where  such  a 
stipulation  may  be  necessary  to  secure  the  entire  effort 
of  each  partner  in  the  common  enterprise.  So  in 
selling  a  business  and  good-will,  a  stipulation  by  the 
seller  not  to  compete  with  the  buyer  is  generally  neces- 
sary in  order  to  deliver  the  custom  which  the  buyer 
seeks  to  acquire.  In  these  and  in  other  cases  of  similar 
character  the  contract  to  refrain  from  competition, 
when  reasonable,  not  wider  than  necessary  to  accom- 
plish the  main  purpose  of  a  lawful  contract,  and  not 
tending  toward  monopoly,  will  be  supported. 

There  has  been  some  doubt  whether  an  agreement 
whose  principal  purpose  was  restriction  of  competition 
could  under  any  circumstances  be  sustained.  The 
decisions  were  considered  at  length  by  the  Circuit 
Court  of  Appeals  in  the  Addyston  case,1  with  the  con- 
clusion that  the  weight  of  authority  was  opposed  to  such 
contracts.  Upon  what  ground,  it  was  asked,  can  courts 
in  the  absence  of  legislation  determine  how  much 
restraint  of  competition  is  in  the  public  interest  and  how 
much  is  not. 

In  many  cases  the  establishment  of  a  standard  is 

1  United  States  v.  Addyston  Pipe  &  Steel  Co.,  85  Fed.  271,  aff.  175  U.  S.  an. 


CARRIERS  AND   CORPORATIONS  179 

wholly  beyond  the  judicial  function.  There  may,  how- 
ever, be  extreme  cases  which  would  warrant  judicial 
interference.  When,  for  example,  railroad  rates  are 
fixed  by  State  authority,  the  Federal  courts,  although 
without  power  to  pass  upon  the  question  of  reasonable- 
ness, have  often  enjoined  the  enforcement  of  rates 
which  were  so  low  as  to  amount  to  confiscation.  If 
competition  be  so  keen  as,  in  the  absence  of  some  under- 
standing, to  bring  ruin  to  competitors,  should  not  a 
reasonable  agreement  to  prevent  such  excesses  be  sup- 
ported ?  Some  cases  support  this  view,  which  may  now 
have  the  support  of  a  majority  of  the  members  of  the 
Supreme  Court.1 

This,  then,  is  the  meaning  of  the  Federal  statute. 

The  first  section  described  two  classes  of  cases,  con- 
tracts in  restraint  of  trade  and  combinations  or  con- 
spiracies in  restraint  of  trade,2  although  in  the  second 
of  these  classes  a  difference  may  possibly  be  recognized 
between  a  combination  and  a  conspiracy.3 

The  second  section  of  the  act  is  not  as  clear  as  the 
first  section.  It  probably  limits  the  restrictions  which, 
at  common  law  and  under  the  first  section,  would  be 
considered  reasonable,  by  forbidding  in  any  event  such 
contracts  as  in  the  common  law  phrase  would  "tend 
toward  monopoly. "  4 

1  See  opinion  of  White,  Field,  Gray,  and  Shiras,  JJ.,  in  United  States  v. 
Freight  Association,  166  U.  S.  290,  343;  United  States  v.  Joint  Traffic 
Association,  171  U.  S.  505;  opinion  of  Mr.  Justice  Brewer  in  Northern 
Securities  Co.  v.  United  States,  193  U.  S.  197,  360. 

2  Opinion  of  Mr.  Justice  Holmes,  in  Northern  Securities  Co.  v.  United 
States,  193  U.  S.  197,  400;   Rice  v.  Standard  Oil  Co.,  134  Fed.  464,  466. 

3  United  States  v.  Debs,  64  Fed.  724,  748. 

4  "All  that  is  added  to  the  first  section  by  section  2  is  that  like  penalties 
are  imposed  upon  every  single  person  who,  without  combination,  monopolizes 
or  attempts  to  monopolize  commerce  among  the  States ;  and  that  the  liability 


180  THE  FEDERAL  POWER   OVER 

The  statute  as  a  whole  is  clear  in  what  it  does  not  do, 
and  substantially  clear  in  what  it  does. 

With  the  conditions  which  cause  inequality  in  com- 
mercial competition,  and  with  corporations  and  part- 
nerships formed  under  State  law,  it  does  not  attempt 
to  deal,  and  when  it  was  urged  upon  the  Supreme  Court 
that  a  literal  following  of  the  statute  would  include  such 
combinations,  it  was  answered  that  "the  formation  of 
corporations  for  business  or  manufacturing  purposes, 
has  never  to  our  knowledge  been  regarded  in  the  nature 
of  a  contract  in  restraint  of  trade  or  commerce.  The 
same  may  be  said  of  the  contract  of  partnership."  1 

That  which  the  statute  effected  was  no  more  than  the 
introduction  of  the  rule  of  the  common  law  into  the 
field  of  Federal  jurisdiction  over  commerce. 

"  We  are  dealing,"  said  Senator  Hoar, "  with  an  offence 
against  interstate  or  international  commerce  .  .  .  and 
we  find  the  United  States  without  any  common  law. 
The  great  thing  that  this  bill  does,  except  affording  a 

is  extended  to  attempting  to  monopolize  any  part  of  such  trade  or  com- 
merce. It  is  more  important  as  an  aid  to  the  construction  of  section  i  than 
it  is  on  its  own  account.  It  shows  that  whatever  is  criminal  when  done  by 
way  of  combination  is  equally  criminal  if  done  by  a  single  man.  That  I  am 
right  in  my  interpretation  of  the  words  of  section  i  is  shown  by  the  words 
'in  the  form  of  trust  or  otherwise.'  The  prohibition  was  suggested  by  the 
trusts,  the  objection  to  which,  as  every  one  knows,  was  not  the  union  of  former 
competitors,  but  the  sinister  power  exercised  or  supposed  to  be  exercised  by 
the  combination  in  keeping  rivals  out  of  the  business,  and  ruining  those  who 
already  were  in.  It  was  the  ferocious  extreme  of  competition  with  others, 
not  the  cessation  of  competition  among  the  partners,  that  was  the  evil  feared. 
Further  proof  is  to  be  found  in  section  7,  giving  an  action  to  any  person 
injured  in  his  business  or  property  by  the  forbidden  contract.  This  cannot 
refer  to  the  parties  to  the  agreement  and  plainly  means  that  outsiders  who 
are  injured  in  their  attempt  to  compete  with  a  trust  or  other  similar  combi- 
nation may  recover  for  it.  .  .  .  How  effective  the  section  may  be  or  how 
far  it  goes,  is  not  material  to  my  point."  Mr.  Justice  Holmes,  in  Northern 
Securities  Co.  v.  United  States,  193  U.  S.  197,  404-405. 

1  United  States  v.  Joint  Traffic  Association,  171  U.  S.  505,  567. 


CARRIERS  AND   CORPORATIONS  181 

remedy,  is  to  extend  the  common  law  principles  which 
protected  fair  competition  in  trade  in  old  times  in  Eng- 
land, to  international  and  interstate  commerce  in  the 
United  States."1  The  Sherman  Act  was,  then,  the  adop- 
tion by  Congress  of  the  policy  of  the  common  law  to 
the  full  extent  of  Federal  jurisdiction,  and  both  the  com- 
mon law  on  the  subject  and  the  extent  of  Federal  power 
were  well  defined  and  understood.  Moreover,  the 
statute  being  criminal  in  character,2  it  was  said  must 
be  strictly  construed.3  A  court  should  not  "  subject  per- 
sons to  the  penalties  thereby  imposed  unless  the  con- 
tract complained  of  is  one  that  is  clearly  within  the 
provisions  of  the  statute."  4 

With  the  conception  of  Federal  jurisdiction  so  long 
accepted,  and  with  the  meaning  of  the  statute  adopted 
by  all  departments  of  government,  administrative 
officers,  during  the  last  few  years,  have  not  been  con- 
tent. This  is  the  conspicuous  feature  of  present  ad- 
ministration of  the  Sherman  Act.  The  Constitution 
is  unaltered.  The  position  of  the  Supreme  Court  has 
not  changed,  but  the  policy  of  government,  neverthe- 
less, has  been  directed  to  extend  Federal  jurisdiction, 
to  impose  new  meanings  upon  the  statute,  and  to  make 

1  Speech  in  Senate,  April  8,  1890,  Cong.  Rec,  Vol.  21,  p.  3152. 

2  "  The  Northern  Securities  Case  and  the  Sherman  Anti-trust  Act,"  by 
Professor  C.  C.  Langdell,  16  Harvard  Law  Review,  539.  "The  Revival 
of  Criminal  Equity,"  by  Mr.  Edwin  S.  Mack,  id.  389.  Opinion  of  Mr. 
Justice  Holmes  in  Northern  Securities  Co.  v.  United  States,  193  U.  S.  197, 
400.  United  States  v.  Joint  Traffic  Ass'n,  76  Fed.  895,  898.  United  States 
v.  Trans-Missouri  Freight  Ass'n,  58  Fed.  58,  77.  "The  conduct  forbidden  by 
the  bill  is  an  injury  to  the  public,  but  there  is  no  injury  to  the  United  States 
as  a  government,  in  respect  of  any  of  its  property,  or  ownership,  or  function." 
Senator  Hoar,  March  24,  1890,  Cong.  Rec,  Vol.  21,  p.  2567. 

3  Greer  Mills  &  Co.  v.  Stoller,  77  Fed.  1,  3. 

4  United  States  v.  Freight  Ass'n,  58  Fed.  58,  77. 


182  THE   FEDERAL  POWER  OVER 

Federal  courts  the  instrument   to  establish  this  new 
body  of  law. 

"For  a  law  which  affected  such  tremendous  interests,"  Sec- 
retary Taft  recently  said,  "its  language  was  not  full  of  useful  de- 
tail in  the  description  of  the  offences  which  were  denounced.  It 
would  seem  as  if  Congress  itself  knew  that  the  evil  existed,  but  had 
a  most  indefinite  idea  of  how  it  was  to  be  described,  and  the  matter 
was  apparently  turned  over  to  the  courts,  as  cases  arose,  and 
decisions  were  invoked,  to  work  out  the  exact  character  of  the 
offences  denounced,  and  the  limitations  which  were  to  be  intro- 
duced into  the  statute,  in  order  that  the  interpretation  of  it  might 
accord  with  what  was  practicable  and  reasonable.  Construed 
literally,  this  statute  could  be  used  to  punish  combinations  of  the 
most  useful  character,  like  partnerships  and  other  business  arrange- 
ments, conceded  by  all  to  be  legitimate  and  proper,  and  the  diffi- 
culty in  its  construction  has  been  to  draw  a  line  effective  to  suppress 
the  real  evil  aimed  at  by  the  legislature,  and  to  furnish  a  proper 
and  clear  rule  for  the  guidance  of  business  men,  while  not  interfer- 
ing with  legitimate  combinations  which  Congress  had  no  purpose 
to  prevent."  1 

In  this  statement  Secretary  Taft  does  not  pretend  to 
give  the  views  of  the  Supreme  Court,  for  that  Court  has 
made  no  decisions  which  would  bear  this  construction. 
There  can  be  no  doubt,  however,  that  the  Secretary  cor- 
rectly stated  the  present  policy  of  government,  and  even 
the  position  of  some  inferior  courts. 

How  has  this  remarkable  change  been  effected  ?  How 
does  it  come  that  a  statute,  well  understood  when  it  was 
passed,  is  now  an  " indefinite  idea"  turned  over  to  the 
courts  for  definition  ?  How  can  the  courts  accept  this 
function  or  "  work  out  the  exact  character  of  the  offences 

1  William  H.  Taft,  Speech  at  Bath,  Me.,  Sept.  5, 1906. 


CARRIERS  AND   CORPORATIONS  183 

denounced,  and  the  limitations  ...  to  be  introduced  into 
the  statute"  except  by  the  exercise  of  power  which  be- 
longs to  Congress  only  ?  Upon  what  ground  are  partner- 
ships and  corporations  now  included  in  the  literal  con- 
struction of  a  statute  from  which  they  were  excluded 
when  the  act  was  passed,  and  if  included,  how  is  the  judi- 
ciary to  draw  a  line  which  shall  permit  some,  suppress- 
ing others,  so  as  "to  furnish  a  proper  and  clear  rule 
for  the  guidance  of  business  men"  ? 

Long  ago  Judge  Taft  remarked  that  "there  are  some 
cases  in  which  the  courts  .  .  .  have  set  sail  on  a  sea  of 
doubt,  and  have  assumed  the  power  to  say .  .  .  how  much 
restraint  of  competition  is  in  the  public  interest,  and 
how  much  is  not."  Of  such  decisions,  he  observed  that 
"the  manifest  danger  in  the  administration  of  justice 
according  to  so  shifting,  vague  and  indeterminate  a 
standard  would  seem  to  be  a  strong  reason  against 
adopting  it."  1 

Other  observers  have  more  emphatically  stated  the 
nature  of  this  manifest  danger.  Judge  Cooley  said  that 
"a  marked  difference  exists  between  the  employments 
of  judicial  and  legislative  tribunals  ....  The  law 
is  applied  by  one,  and  made  by  the  other.  To  do  the 
first,  therefore,  —  to  compare  the  claims  of  parties  with 
the  law  of  the  land  before  established,  —  is  in  its  nature 
a  judicial  act.  But  to  do  the  last  —  to  pass  new  rules 
for  the  regulation  of  new  controversies  —  is  in  its  nature 
a  legislative  act ;  and  if  these  rules  interfere  with  the 
past,  or  the  present,  and  do  not  look  wholly  to  the  future, 
they  violate  the  definition  of  a  law  as  a  'rule  of  civil 

1  United  States  v.  Addyston,  &c,  Co.,  85  Fed.  271,  284. 


1 84  THE   FEDERAL  POWER   OVER 

conduct';  because  no  rule  of  conduct  can  with  con- 
sistency operate  upon  what  occurred  before  the  rule 
itself  was  promulgated. "  * 

Mr.  Justice  Story  said  that  were  the  judicial  powers 
"  joined  with  the  legislative,  the  life,  liberty  and  property 
of  the  subject  would  be  in  the  hands  of  arbitrary  judges 
whose  decisions  would  then  be  regulated  only  by  their 
opinions,  and  not  by  any  fundamental  principles  of 
law."  2  This  "may  justly  be  pronounced  the  very 
definition  of  tyranny."  3 

Judicial  History  of  the  Statute.  In  the  courts, 
decisions  upon  the  statute  fall  naturally  into  two  classes, 
—  those  which  construe  the  act  itself,  and  those  which 
consider  the  field  for  its  constitutional  operation. 

Construction.  Collateral  contracts.  The  statute 
forbids  only  those  contracts  which  directly  affect 
interstate  commerce.  That  complainant  is  a  member 
of  a  combination  in  violation  of  the  act  does  not  excuse 
infringement  of  a  patent 4  or  a  copyright,5  nor  is  it  a 
defence  to  an  action  for  infringement  of  a  trade-mark 
that  complainant  had  acquired  and  used  the  mark  in 
violation  of  the  statute.6  One  purchasing  from  an 
illegal  combination  cannot  refuse  to  accept  the  goods  7 
or  resist  an  action  for  the  price,  either  on  the  ground  that 

1  Cooley  Const.  Lim.,  pp.  133-134  (7th  ed.). 

2  Commentaries  on  the  Constitution  (5th  ed.),  Sec.  522. 

3  Federalist,  No.  47. 

4  General  Electric  Co.  v.  Wise,  119  Fed.  922;  Bement  v.  Harrow  Co., 
186  U.  S.  70.  Compare  Rubber  Tire  Wheel  Co.  v.  Milwaukee  Rubber 
Works  Co.,  142  Fed.  531 ;  Indiana  Manufacturing  Co.  v.  Threshing  Machine 
Co.  148  Fed.  21. 

6  Scribner  v.  Straus,  130  Fed.  389. 

6  Independent  Baking  Powder  Co.  v.  Boorman,  130  Fed.  726. 

7  Hadley  Dean  Plate  Glass  Co.  v.  Highland  Glass  Co.,  143  Fed.  242. 


CARRIERS  AND   CORPORATIONS  185 

the  combination  was  illegal,  or  the  price  beyond  what  it 
would  have  been  under  free  competition.1  The  rem- 
edy given  to  individuals  injured  through  violation 
of  the  statute  is  in  an  action  for  damages  under 
the  seventh  section.2  In  one  case  an  injunction 
sought  by  a  railroad  company  to  prevent  sales  of 
passage  tickets  by  unauthorized  persons,  was  denied 
on  the  ground  that  complainant  was  a  member  of  an 
illegal  association,3  but  in  a  similar  case  in  a  State  court 
it  was  held  that  the  contract  contained  in  the  ticket  is 
collateral  and  that  such  an  injunction  should  be  granted.4 
One  who  requests  and  accepts  services  must  pay  the 
agreed  price,  although  those  who  render  the  service 
may  have  formed  an  association  in  violation  of  the 
act.5  Securities  in  the  hands  of  innocent  purchasers 
for  value,  are  not  invalid  because  their  enforcement 
may  aid  a  violation  of  the  anti-trust  law,6  nor  is  a 
violation  of  the  law  by  complainant  a  defence  to  a 
bill  to  foreclose  a  mortgage,7  nor  to  any  contract  not 
directly  related  to  the  unlawful  purpose.8 

Construction.  Injunctions.  The  statute  gives  to  in- 
dividuals no  new  right  to  relief  in  equity,  and  authorizes 

1  Connolly  v.  Union  Sewer  Pipe  Co.,  184  U.  S.  540;  Dennehy  v.  Mc- 
Nulta,  86  Fed.  825.  See  Chicago  Wall  Paper  Mills  v.  General  Paper  Co., 
147  Fed.  491.  Compare,  however,  Continental  Wall  Paper  Co.  v.  Lewis 
Voight  &  Sons  Co.,  U.  S.  Cir.  Ct.  of  Appeals,  6th  Circuit,  Dec.  4,  1906. 

2  Atlanta  v.  Chattanooga  Foundry  Co.,  101  Fed.  900;  127  Fed.  23; 
Chattanooga,  &c,  Works  v.  City  of  Atlanta,  decided  by  U.  S.  Supreme 
Court,  Dec.  3,  1906. 

3  Delaware,  L.  &  W.  R.  R.  Co.  v.  Frank,  no  Fed.  689. 

4  Kinner  v.  Lake  Shore,  &c,  R.  R.  Co.,  23  Ohio  Circuit  Ct.  Rep.  294. 

5  The  Charles  E.  Wisewall,  74  Fed.  802 ;  86  Fed.  671 ;  approved  in  184 
U.  S.  540.  6  Ingraham  v.  National  Salt  Co.,  130  Fed.  676. 

7  Dikerman  v.  Northern  Trust  Co.,  176  U.  S.  181. 

8  Harrison  v.  Glucose,  &c,  Refining  Co.,  116  Fed.  304. 


Z86  THE  FEDERAL  POWER  OVER 

issuance  of  injunctions  only  in  suits  brought  by  the 
United  States.1  Combinations  in  restraint  of  inter- 
state commerce  are  however  made  unlawful;  and  where 
such  a  combination  threatens  irreparable  injury  under 
circumstances  which,  upon  general  principles  of  equity 
authorize  the  relief,  an  injunction  will  be  granted.2  A 
court  cannot  by  virtue  of  this  statute  grant  a  mandatory 
injunction  by  which  persons  will,  in  effect,  be  compelled 
to  enter  into  contracts.  A  railroad  company  may  make 
an  exclusive  contract  for  through  billing  and  rating,3  and 
a  court  cannot  in  order  to  prevent  discrimination  compel 
similar  contracts  with  other  carriers.4 

Application  of  the  statute  to  railroads.  In  a  number 
of  early  cases  the  act  was  applied  to  combinations  of 
laborers  to  interrupt  free  passage  from  State  to  State, 
the  defendants  in  most  instances  being  railroad  em- 
ployees.5 At  this  point  in  the  process  of  judicial  con- 
struction the  case  of  the  Freight  Association  6  presented 
to  the  Supreme  Court  the  question  whether  the  act 
applied  to  interstate  carriers. 

Of  the  intention  of  Congress  there  is  probably  little 

blindell  v.  Hagan,  54  Fed.  40;  Hagan  v.  Blindell,  56  Fed.  696;  Pid- 
cock  v.  Harrington,  64  Fed.  821 ;  Greer  v.  Stoller,  77  Fed.  1 ;  Post  v.  South- 
ern Rv.  Co.  (Tenn.),  52  S.  W.  301 ;  Southern  Indiana  Express  Co.  v.  United 
States' Express  Co.,  88  Fed.  659. 

2  Blindell  v.  Hagan,  54  Fed.  40;  56  id.  696;  Gulf,  &c,  Ry.  Co.  v.  Miami 
S.  S.  Co.,  86  Fed.  407;   Conf.  Shelton  v.  Piatt,  139  U.  S.  591. 

3  St.  Louis  Drayage  Co.  v.  Louisville  &  N.  R.  R.  Co.,  65  Fed.  39;  Pres- 
cott,  &c.,  R.  R.  Co.  v.  Atchison,  &c,  R.  R.  Co.,  73  Fed.  438;  84  Fed.  213. 

4  Gulf,  &c.,  R.  R.  Co.  v.  Miami  S.  S.  Co.,  86  Fed.  407. 

6  United  States  v.  Workingman's  Council,  54  Fed.  994 ;  Waterhouse  v. 
Comer,  55  Fed.  149;  United  States  v.  Elliott,  62  Fed.  801;  64  Fed.  27; 
Thomas  v.  Ry.  Co.,  62  Fed.  803 ;  United  States  v.  Agler,  62  Fed.  824 ; 
Charge  to  Grand  Jury,  62  Fed.  828,  834,  840;  United  States  v.  Debs,  64 
Fed.  724;  United  States  v.  Cassidy,  67  Fed.  698;  In  re  Debs,  158  United 
States,  564. 

8  United  States  v.  Trans-Missouri  Freight  Ass'n,  166  U.  S.  290,  334. 


CARRIERS  AND  CORPORATIONS  187 

doubt.  Railroad  transportation  had  been  covered  in 
1887  by  the  Interstate  Commerce  Act.  The  Sherman 
Act  of  1890  was  intended  to  cover  not  transportation, 
but  trade.  "No  rule  is  better  settled  than,  where  a  gen- 
eral statute  has  been  enacted,  which  might  include,  in 
the  absence  of  other  provisions,  a  subject  matter  which 
has  already  received  consideration  at  the  hands  of  the 
legislature  by  a  special  act,  the  general  act  will  not  be 
construed  to  embrace  the  subject  contained  in  the  special 
act,  unless  it  clearly  appears  from  the  language  em- 
ployed that  it  was  the  intention  of  the  legislature  that 
it  should  be  so  included."  1 

No  such  intention  appears  from  the  act  —  indeed,  in 
some  respects  the  two  statutes  if  applied  to  the  same 
subject  are  inconsistent  with  each  other. 

The  explanation  is  that  the  Sherman  Act  was  not  in- 
tended to  operate  upon  the  business  of  transportation, 
and  this  conclusion,  which  appears  upon  the  face  of  the 
statute,  is  strengthened  by  reference  to  the  debates  in 
Congress.2  The  courts  had  however  necessarily  ap- 
plied the  law  to  the  employees  of  railroads.3    Could  it 

1  United  States  v.  Freight  Ass'n,  53  Fed.  440,  455. 

2  The  bill,  as  framed  by  the  Senate,  made  no  reference  to  transportation. 
In  the  House  an  amendment  was  offered  forbidding  contracts  to  prevent  com- 
petition for  transportation  of  persons  or  property  from  one  State  to  another. 
Cong.  Rec,  Vol.  21,  Part  5,  p.  4099.  In  the  Senate  the  House  amendment 
was  amended  by  limiting  the  prohibition  to  contracts  "so  that  the  rates  of 
such  transportation  may  be  raised  above  what  is  just  and  reasonable." 
Cong.  Rec,  Vol.  21,  Part  5,  p.  4753.  In  this  modification  the  House  refused 
to  concur  and  a  conference  was  had  which  resulted  in  a  report  favoring  the 
Senate  amendment,  saving,  however,  State  jurisdiction.  In  this  report  the 
House  again  refused  to  concur.  Cong.  Rec,  Vol.  21,  Part  6,  p.  5981.  Sub- 
sequently both  Senate  and  House  receded  from  their  amendments,  Cong.  Rec, 
Vol.  21,  Part  7,  pp.  6208,  6312,  and  the  bill  became  a  law  in  the  form  in  which 
it  originally  passed  the  Senate,  without  reference  to  transportation. 

3  A  proviso  that  the  Sherman  Act  should  not  apply  "to  any  arrangements, 
agreements  or  combinations,  made  between  laborers  with  a  view  of  lessening 


1 88  THE  FEDERAL  POWER  OVER 

be  said  then  that  the  employer  was  exempt  ?  Was  the 
statute  intended  to  prevent  violent  interference  with 
interstate  commerce  and  at  the  same  time  to  permit 
such  interference  as  might  come  from  contracts  which 
restrained  competition  between  carriers?  When  the 
employee  sought  to  throw  the  whole  burden  of  the  law 
upon  the  employer,  the  courts  refused  to  admit  a  dif- 
ference between  them. 

"If  the  officers  or  agents  of  the  car  companies,  who  might  or 
might  not  be  capitalists,  would  be  individually  responsible  for 
violating  the  statute,  upon  what  principle  could  the  brakeman  or 
switchman  be  exempt?  .  .  .  Does  the  guilt  or  innocence  of  the 
defendants  of  the  charge  of  conspiracy,  under  this  statute,  depend 
on  the  proof  there  may  be  of  their  success  in  drawing  to  the  support 
of  their  design  those  who  may  be  called  capitalists,  or  does  it  de- 
pend upon  the  character  of  the  design  itself,  and  upon  what  has 
been  done  towards  its  accomplishment  by  themselves  and  by  those 
in  voluntary  co-operation  with  them,  from  whatever  employment 
or  walk  in  life  ?  "  1 

Railroads  then  could  not  be  exempt  from  the  opera- 
tion of  the  statute.  If  it  be  said  that  a  distinction  was 
made  by  Congress  which  had  regulated  railroads  by  one 
act  and  laborers  by  another,  the  answer  must  be  that 
Congress  had  forbidden  all  combinations  which  re- 
strained commerce;  that  the  prohibition  applied  to  all 
who  interfered  with  transportation  and  that  this  might 
as  easily  be  accomplished  by  a  combination  of  carriers 

hours  of  labor  or  of  increasing  their  wages,  nor  to  any  arrangements,  agree- 
ments or  combinations  among  persons  engaged  in  horticulture  or  agriculture, 
made  with  the  view  of  enhancing  the  price  of  agricultural  or  horticultural 
products"  was  not  adopted. 

1  United  States  v.  Debs,  64  Fed.  755.  See  speech  of  Senator  Edmunds, 
March  27,  1890,  21  Cong.  Rec,  pp.  2728-2729. 


CARRIERS  AND   CORPORATIONS  189 

as  by  a  combination  of  their  employees.  The  question 
was  not  free  from  difficulty,  but  the  distinction  which 
Congress  may  have  intended,  appeared  in  practice  to  be 
impossible  of  observance. 

Extent  of  the  prohibition.  This  conclusion  at  once 
presented  the  further  difficulty  of  rinding  for  the  statute 
a  rule  of  construction  applicable  at  the  same  time  to 
combinations  of  employees  and  of  employers. 

In  forbidding  contracts  and  combinations  in  re- 
straint of  trade,  Congress  had  employed  a  phrase  well 
known  to  the  courts.  In  those  classes  of  cases  to  which 
it  had  traditionally  been  applied,  the  law  had  given 
to  the  phrase  a  well-understood  definition.  Many  con- 
tracts restrain  trade  more  or  less,  but  those  which  could 
affirmatively,  with  reference  to  some  accepted  standard, 
be  shown  to  be  reasonable,  were  on  this  ground  upheld. 
This  practice  appears  to  be  acknowledged  in  the  title 
of  the  Federal  statute,  —  "An  act  to  protect  trade  and 
commerce  against  unlawful  restraints  and  monopolies." 
It  seems  to  have  been  recognized,  however,  when  the  bill 
was  before  Congress  that  its  operation  might  be  wider 
than  the  legal  definitions  of  the  terms  employed,1  and  in 
application  by  the  courts  this  fact  soon  became  evident. 

In  the  case  of  labor  unions  the  law  provided  no  stand- 
ard by  which  to  measure  the  question  of  reasonableness. 
There  are  historical  and  logical  rules  by  which  a  court 
can  determine  how  far  the  vender  of  a  business  should 

1  The  Chairman  of  the  Judiciary  Committee  of  the  House  in  reporting 
the  bill  said,  "Now  just  what  contracts,  what  combinations  in  the  form  of 
trusts,  or  what  conspiracies  will  be  in  restraint  of  the  trade  or  commerce  men- 
tioned in  the  bill,  will  not  be  known  until  the  courts  have  construed  and  inter- 
preted this  provision."     Vol.  21,  Cong.  Rec,  Part  5,  p.  4089. 


I9o  THE   FEDERAL  POWER   OVER 

restrain  himself  from  competition,  but  there  are  no  rules 
which  enable  courts  to  fix  rates  of  wages  for  switchmen, 
engineers,  or  any  other  class  of  laborers  throughout  the 
country,  or  to  determine  the  hours  of  work  or  conditions 
of  service. 

The  question  of  reasonableness,  then,  upon  which 
courts  are  accustomed  to  pass  under  conditions  for 
which  the  law  has  established  standards  capable  of 
judicial  application,  is  not  a  judicial  question  under  con- 
ditions such  as  those  which  are  presented  in  most  cases 
arising  upon  combinations  of  workmen.  Violence,  it 
may  be  admitted,  is  itself  a  violation  of  law,  and  a  com- 
bination to  do  violence  is  necessarily  unreasonable. 
What  shall  be  said,  however,  of  a  combination  of  a  large 
number  of  laborers,  which  without  violence  —  whether 
successfully  or  not  —  attempts  to  prevent  the  operation 
of  great  avenues  of  interstate  transportation?  It  is  the 
combination  which  the  statute  forbids,  and  the  alterna- 
tive in  all  such  cases  is  therefore  presented  to  the  court, 
to  declare  every  such  combination  illegal  under  the 
statute,  or  in  every  case  to  enter  into  the  consideration 
of  the  reasonableness  of  the  purposes  which  it  may  seek 
to  accomplish.  The  latter  they  could  not  do.  "  We  did 
not  put  into  our  bill,"  said  Senator  Hoar,  "the  words 
'unlawfully  and  improperly  restrained'  because  we  were 
afraid  it  would  be  objected  that  we  were  giving  the  court 
a  legislative  power  to  declare  what  was  improper."  * 

Here  then  is  the  fundamental  difficulty  with  the  Sher- 
man Act,  that  it  attempted  to  impose  upon  the  courts  the 

1  Speech  in  Senate,  Jan.  6,  1903,  Cong.  Rec,  Vol.  36,  Part  1,  p.  522, 
57th  Cong.,  2d  Sess. 


CARRIERS  AND   CORPORATIONS 


191 


duty  which  Congress  had  been  unable  to  perform,  of 
distinguishing  between  those  combinations  which  should 
be  permitted,  and  those  which  should  be  forbidden. 
Under  the  form  of  using  words  which  had  a  settled  legal 
meaning,  but  nevertheless  a  meaning  which  was  inap- 
plicable to  the  economic  conditions  which  the  statute 
was  intended  to  remedy,  the  courts  were  to  be  compelled 
to  determine  what  combinations  were  lawful  and  reason- 
able, and  what  were  unlawful  and  unreasonable.  This 
duty  a  court  in  the  nature  of  things  cannot  perform, 
and  had  the  statute  at  once  shown  that  the  questions 
involved  were  of  the  character  which  experience  has 
now  disclosed,  the  act  might  have  been  declared  uncon- 
stitutional. 

The  nature  of  the  statute  did  not,  however,  at  that 
time  appear.  Its  language  was  simple  —  all  combina- 
tions in  restraint  of  interstate  trade  were  forbidden.  No 
standard  of  reasonableness  existed  which  could  apply 
to  all  combinations,  and  no  distinction  could  be  made  in 
the  construction  of  a  statute  which  forbade  all  alike. 
It  was  impossible  for  courts  to  set  up  a  standard  of 
reasonableness.  When  this  subject  was  presented  by 
combinations  of  railroad  employees  the  court  held  that 
"A  combination  whose  professed  object  is  to  arrest  the 
operation  of  railroads  whose  lines  extend  from  a  great 
city  into  adjoining  States,  until  such  roads  accede  to 
certain  demands  made  upon  them,  whether  such  de- 
mands are  in  themselves  reasonable  or  unreasonable, 
just  or  unjust,  is  certainly  an  unlawful  conspiracy  in 
restraint  of  commerce  among  the  States."  * 

1  United  States  v.  Elliott,  62  Fed.  801,  803. 


1 92  THE   FEDERAL  POWER   OVER 

This  doctrine  was  followed  by  a  divided  court  in  the 
case  of  the  Trans- Missouri  Freight  Association/  a  com- 
bination of  common  carriers,  formed  under  conditions 
of  excessive  competition  for  the  maintenance  of  reason- 
able rates.  Such  an  agreement  the  Court  said  was  in 
restraint  of  commerce  among  the  States,  and  as  such 
prohibited  by  the  statute.  It  was  impossible  to  make 
the  validity  of  such  contracts  depend  upon  the  view 
which  a  court  might  take  as  to  what  was  reasonable, 
for  no  standard  existed  by  which  reasonableness  could 
be  measured. 

"If  only  that  kind  of  a  contract  which  is  in  unreasonable 
restraint  of  trade  be  within  the  meaning  of  the  statute  and  declared 
therein  to  be  illegal,  it  is  at  once  apparent  that  the  subject  of  what 
is  a  reasonable  rate  is  attended  with  great  uncertainty.  What  is 
a  proper  standard  by  which  to  judge  the  fact  of  reasonable  rates  ? 
Must  the  rate  be  so  high  as  to  enable  the  return  for  the  whole  busi- 
ness done  to  amount  to  a  sum  sufficient  to  afford  the  shareholder 
a  fair  and  reasonable  profit  upon  his  investment  ?  If  so,  what  is  a 
fair  and  reasonable  profit?  That  depends  sometimes  upon  the 
risk  incurred,  and  the  rate  itself  differs  in  different  localities: 
which  is  the  one  to  which  reference  is  to  be  made  as  the  standard  ? 
Or  is  the  reasonableness  of  the  profit  to  be  limited  to  a  fair  return 
upon  the  capital  that  would  have  been  sufficient  to  build  and 
equip  the  road,  if  honestly  expended  ?  Or  is  still  another  standard 
to  be  created,  and  the  reasonableness  of  the  charges  tried  by  the 
cost  of  the  carriage  of  the  article  and  a  reasonable  profit  allowed 
on  that  ?  And  in  such  case  would  contribution  to  a  sinking  fund 
to  make  repairs  upon  the  roadbed  and  renewal  of  cars,  etc.,  be 
assumed  as  a  proper  item  ?  Or  is  the  reasonableness  of  the  charge 
to  be  tested  by  reference  to  the  charges  for  the  transportation  of 
the  same  kind  of  property  made  by  other  roads  similarly  situated  ? 

1 166  U.  S.  290. 


CARRIERS  AND   CORPORATIONS 


193 


If  the  latter,  a  combination  among  such  roads  as  to  rates  would,  of 
course,  furnish  no  means  of  answering  the  question.  It  is  quite 
apparent,  therefore,  that  it  is  exceedingly  difficult  to  formulate 
even  the  terms  of  the  rule  itself  which  should  govern  in  the  matter 
of  determining  what  would  be  reasonable  rates  for  transporta- 
tion." ■ 

Into  these  questions  the  Court  refused  to  go :  — 

"  The  arguments  which  have  been  addressed  to  us  against  the 
inclusion  of  all  contracts  in  restraint  of  trade,  as  provided  for  by 
the  language  of  the  act,  have  been  based  upon  the  alleged  pre- 
sumption that  Congress,  notwithstanding  the  language  of  the  act, 
could  not  have  intended  to  embrace  all  contracts,  but  only  such 
contracts  as  were  in  unreasonable  restraint  of  trade.  Under 
these  circumstances  we  are,  therefore,  asked  to  hold  that  the  act  of 
Congress  excepts  contracts  which  are  not  in  unreasonable  restraint 
of  trade,  and  which  only  keep  rates  up  to  a  reasonable  price,  not- 
withstanding the  language  of  the  act  makes  no  such  exception. 
In  other  words,  we  are  asked  to  read  into  the  act  by  way  of  judi- 
cial legislation  an  exception  that  is  not  placed  there  by  the  law-mak- 
ing branch  of  the  Government,  and  this  is  to  be  done  upon  the 
theory  that  the  impolicy  of  such  legislation  is  so  clear  that  it  can- 
not be  supposed  Congress  intended  the  natural  import  of  the 
language  it  used.     This  we  cannot  and  ought  not  to  do."  2 

This  decision,  representing  probably  the  only  con- 
clusion which  could  be  reached  by  a  judicial  body,  was 
rendered  by  a  divided  court,  and  became  at  once  the 
subject  of  widespread  criticism.3  If  all  contracts  which 
in  any  degree  restrain  trade  be  void,  it  was  said,  the 
formation  of  corporations,  the  contract  of  partnership, 
the  sale  of  the  good  will  of  a  business,  and  many  other 

1  United  States  v.  Freight  Ass'n,  166  U.  S.  290,  331,  332,  followed 
by  United  States  v.  Joint  Traffic  Ass'n,   171  U.  S.  505. 

2  166  U.  S.  340. 

3  See  "Constitutionality  of  the  Anti-trust  Act,"  by  Mr.  William  D. 
Guthrie,  1 1  Harvard  Law  Review,  80. 

o 


i94  THE   FEDERAL  POWER   OVER 

ordinary  transactions  of  commerce,  were  forbidden.  A 
judgment  which  brings  reasonable  contracts  within  the 
condemnation  of  the  statute,  Mr.  Justice  White  said, 
"is  tantamount  to  an  assertion  that  the  act  of  Congress 
is  itself  unreasonable.  The  difficulty  of  meeting,  by 
reasoning,  a  premise  of  this  nature  is  frankly  conceded, 
for  .  .  .  it  would  seem  conducive  to  no  useful  purpose 
to  invoke  reason  as  applicable  to  and  as  controlling 
the  construction  of  a  statute  which  is  admitted  to  be 
beyond  the  pale  of  reason."  * 

The  criticism  seems  to  go  farther  than  the  doctrine 
of  the  prevailing  opinion.  The  language  in  which  the 
majority  of  the  Court  announced  their  conclusions  was 
broad.  Some  of  the  phrases  employed  appeared  to  in- 
troduce a  radical  departure  from  the  rules  of  the  com- 
mon law,  but  it  is  clear  now  that  no  such  departure  was 
intended.  The  formation  of  corporations  for  business  or 
manufacturing  purposes,  the  Court  later  remarked,  has 
never  been  regarded  as  in  the  nature  of  a  contract  re- 
straining trade,  and  the  same  may  be  said  of  a  contract 
of  partnership.2  So,  too,  a  contract  by  the  seller  of  a 
business  to  refrain  from  competition  with  the  buyer  has 
been  sustained.3  Contracts  known  as  "factors'  agree- 
ments" 4  and  agreements  by  which  the  purchaser  of  an 
article  restricts  the  territory  for  his  trade  in  that  article 5 


1  1 66  U.  S.  344. 

2  United  States  v.  Joint  Traffic  Ass'n,  171  U.  S.  505. 

3  Cincinnati  Packet  Co.  v.  Bay,  200  U.  S.  179. 

4  Whitwell  v.  Continental  Tobacco  Co.,  125  Fed.  454;  Lanyon  v.  Gar- 
den City  Sand  Co.,  79  N.  E.  Rep.  313 ;  Conf .  Norton  v.  Thomas  &  Sons  Co., 
93  S.  W.  711;  and  Commonwealth  v.  Straus,  78  N.E.  136,  the  statute  in 
this  latter  case  being  broader  than  the  Sherman  Act. 

6  Phillips  v.  Iola  Cement  Co.,  125  Fed.  593. 


CARRIERS  AND  CORPORATIONS 


195 


have  also  been  sustained,  as  have  limitations  imposed  by 
the  Chicago  Board  of  Trade  upon  the  distribution  of  its 
quotations.1 

In  substance  then  the  decision  which  at  first  seemed 
so  radical,  in  fact  left  all  those  contracts  in  which  the 
restraint  of  trade  was  imposed  as  ancillary  to  the  main 
purpose  of  a  lawful  contract,  precisely  where  they  were 
at  common  law.  These  contracts  carry  in  their  own 
provisions  the  standard  by  which  the  reasonableness 
of  the  restriction  may  be  measured. 

Even  as  thus  applied,  however,  the  statute  probably 
goes  farther  than  the  intentions  of  Congress. 

The  large  number  of  mercantile  exchanges  and 
boards  of  trade  throughout  the  country  show  the  demand 
for  some  organization  by  which  buyers  and  sellers  can 
be  brought  together,  and  experience  shows  the  neces- 
sity, in  such  cases,  of  having  a  general  agreement  fixing 
the  amount  of  commissions  and  other  charges.  A  rule 
which  would  make  these  organizations  illegal  would  em- 
barrass commercial  intercourse,  and  yet  in  two  cases2 
this  result  was  avoided  only  by  narrowing  the  definition 
of  interstate  commerce.  The  questions  which  arise  upon 
the  statute  are  many  and  difficult.  The  Court  cannot 
refuse  to  consider  the  effects  of  its  decisions,  and  yet 
cases  like  these,  which  introduce  into  a  statute  exceptions 
not  made  by  Congress,  seem,  for  a  doubtful  advantage,3 
to  introduce  the  element  of  uncertainty  into  the  law. 

1  Board  of  Trade  v.  Christie  Grain  &  Stock  Co.,  198  U.  S.  236. 

2  Hopkins  v.  United  States,  171  U.  S.  578,  and  Anderson  v.  United  States, 
171  U.  S.  604. 

3  The  exchange  before  the  Court  in  the  Hopkins  Case  was  held  illegal  under 
State  law.  Greer  v.  Payne,  4  Kan.  App.  153.  See  Cattle  Raisers  Ass'n 
v.  Fort  Worthy  &c,  R.  R.  Co.,  7  Int.  Com.  Rep.  513,  535. 


196  THE  FEDERAL  POWER  OVER 

The  field  of  Federal  jurisdiction.  The  cases  marking 
the  line  of  division  between  State  and  Federal  powers 
indicate  even  greater  uncertainty  than  those  which  con- 
strue the  terms  of  the  statute. 

Early  decisions  gave  to  the  act  the  operation  which 
Senator  Hoar  anticipated.  The  acquisition  by  an  Illi- 
nois corporation  of  most  of  the  distilleries  in  the  country, 
located  in  many  different  States,  and  supplying  markets 
in  all  the  States,  did  not  violate  Federal  law.1  The  same 
rule  was  applied  to  the  acquisition  by  a  New  Jersey 
corporation  of  substantially  all  the  sugar  refineries  in 
the  country.  In  this  case  the  Circuit  Court  held  that 
"The  contracts  and  acts  of  the  defendants  relate  ex- 
clusively to  the  acquisition  of  sugar  refineries  and  the 
business  of  sugar  refining  in  Pennsylvania.  They  have 
no  reference  and  bear  no  relation  to  commerce  between 
the  States  or  with  foreign  nations.  Granting  therefore 
that  a  monopoly  exists  in  the  ownership  of  such  refineries 
and  business  (with  which  the  laws  and  courts  of  the 
State  may  deal)  it  does  not  constitute  a  restriction  or 
monopoly  of  interstate  or  international  commerce.  The 
latter  is  untouched,  unrestrained  and  open  to  all  who 
choose  to  engage  in  it.  .  .  .  It  is  the  stream  of  commerce 
flowing  across  the  States,  and  between  them  and  foreign 
nations,  that  Congress  is  authorized  to  regulate."  2  In 
the  Circuit  Court  of  Appeals  this  doctrine  was  affirmed. 
"The  utmost  that  can  be  said  —  and  this,  for  the  present 
purpose,  may  be  assumed  —  is  that  they  have  acquired 

1  United  States  v.  Greenhut,  50  Fed.  469 ;  In  re  Corning,  51  Fed.  205 ;  In 
re  Terrell,  51  Fed.  213;  In  re  Greene,  52  Fed.  104;  see,  however,  American 
Biscuit  Co.  v.  Klotz,  44  Fed.  721. 

2  United  States  v.  E.  C.  Knight  Co.,  60  Fed.  306,  309. 


CARRIERS  AND  CORPORATIONS  197 

control  of  the  business  of  refining  and  selling  sugar  in 
the  United  States.  But  does  this  involve  monopoly,  or 
restraint,  of  foreign  or  interstate  commerce?  We  are 
clearly  of  opinion  that  it  does  not."  ' 

" Doubtless,"  Mr.  Chief  Justice  Fuller  said,  "the  power  to  con- 
trol the  manufacture  of  a  given  thing  involves  in  a  certain  sense 
the  control  of  its  disposition,  but  this  is  a  secondary  and  not  the 
primary  sense;  and  although  the  exercise  of  that  power  may 
result  in  bringing  the  operation  of  commerce  into  play,  it  does  not 
control  it,  and  affects  it  only  incidentally  and  indirectly."  2  "  Con- 
gress certainly  has  not  the  power  or  authority  under  the  commerce 
clause,  or  any  other  provision  of  the  Constitution  to  limit  .  .  . 
the  right  of  corporations  created  by  the  States,  or  the  citizens  of  the 
States,  in  the  acquisition,  control,  and  disposition  of  property."  3 

On  the  other  hand  a  combination  of  producers  in 
Kentucky,  to  fix  the  price  of  an  article  in  Nashville, 
Tennessee,  was  held  to  be  within  the  Federal  prohi- 
bition.4 The  same  conclusion  was  reached  in  the 
case  of  a  combination  of  coal  dealers  in  West  Vir- 
ginia under  a  contract  creating  a  joint  selling  agency 
for  "the  western  market,"  each  member  agreeing  not  to 
ship  to  points  west  of  their  mines,  except  under  the 
terms  of  the  contract.5 

In  both  of  these  cases  the  combination  referred  to 
contracts  for  sale  and  delivery  across  State  lines,  —  in 
the  first  case  the  territory  covered  being  described  by 
reference  to  political  boundaries;  in  the  second  case  by 

1  United  States  v.  E.  C.  Knight  Co.,  60  Fed.  934,  936. 

2  United  States  v.  E.  C.  Knight  Co.,  156  U.  S.  1,  12 ;  Merz  Capsule  Co. 
v.  U.  S.  Capsule  Co.,  67  Fed.  414. 

3  Judge  —  afterward  Mr.  Justice  —  Jackson,  In  re  Greene,  52  Fed.  104, 
112-113. 

4  United  States  v.  Jellico  Mountain  Coal,  etc.,  Co.,  46  Fed.  432. 
8  United  States  v.  Chesapeake,  etc.,  Fuel  Co.,  105  Fed.  93. 


ig8  THE   FEDERAL  POWER   OVER 

reference,  in  commercial  phrase,  to  the  place  of  pro- 
duction and  the  market  for  distribution. 

The  same  rule  was  applied  in  Lowry  v.  Tile  Associa- 
tion.1 This  was  a  combination  of  dealers  in  tiles  in  San 
Francisco.  Manufacturers  wherever  located  were  eli- 
gible to  non-resident  membership,  and  it  was  agreed  that 
no  dealer  member  should  purchase  from  a  manufac- 
turer not  a  member,  and  that  no  manufacturer  member 
should  sell  to  non-members  in  San  Francisco.  It  was 
stated  that  all  tile  used  about  dwellings  in  California 
was  manufactured  in  Eastern  States.  Whether  this 
were  true  or  not,  the  contract,  however  worded,  if  so 
drawn  as  to  restrict  the  right  of  members  to  purchase  or 
sell  goods  in  other  States,  was  to  that  extent  within  the 
Federal  statute.  This  decision  was  affirmed  by  the 
Supreme  Court.2 

Up  to  this  point,  the  line  between  State  and  Federal 
jurisdiction  was  well  defined  and  observed.  The  in- 
definiteness,  of  which  Secretary  Taft  speaks,  exists  only 
in  courts  of  inferior  authority,  and  is  the  result  of  a  very 
recent  attempt  to  abandon  established  doctrines,  and 
to  overstep  established  restrictions  of  power.  An  an- 
nouncement of  these  new  rules  is  found  in  Gibbs  v. 
McNeeley,3  an  action  for  damages  under  the  seventh 
section  of  the  statute.  The  plaintiff  in  this  case  alleged 
that  he  had  been  engaged  in  the  business  of  buying  red 
shingles,  in  the  State  of  Washington  from  manufacturers 

x98  Fed.  817;  106  Fed.  38;  115  Fed.  27;  Ellis  v.  Inman,  Poulsen  & 
Company,  124  Fed.  956;  131  Fed.  182. 

2  Montague  v.  Lowry,  193  U.  S.  38.  See  also  United  States  v.  Swift  &  Co., 
196  U.  S.  375;    122  Fed.  529. 

3  102  Fed.  594;   107  Fed.  210;   118  Fed.  120. 


CARRIERS  AND   CORPORATIONS  199 

in  that  State,  and  selling  in  other  States  and  countries; 
that  these  shingles  are  made  only  in  Washington,  the 
output  being  very  large,  and  a  comparatively  small 
amount  only  being  consumed  in  that  State;  that  the 
defendants,  who  were  manufacturers  of  shingles,  had 
entered  into  a  combination  fixing  prices  at  so  high  a 
figure  that  plaintiff's  former  customers  refused  to  con- 
tinue their  trade;  also  that  defendants  in  pursuance  of 
these  purposes,  had  closed  their  mills  and  that  in  conse- 
quence plaintiffs  had  been  entirely  unable  to  purchase 
shingles.  The  lower  court  held  that  neither  in  his 
charge  of  a  combination  to  fix  prices,  nor  in  the  con- 
certed closing  of  mills,  had  plaintiff  shown  a  violation 
of  the  Federal  statute. 

"Both  of  these  causes  of  action  appear  to  be  predicated  upon 
a  notion  that  because  the  plaintiff  was  a  buyer,  and  exporter  of 
shingles  he  had  a  vested  right  to  the  benefit  of  unrestrained  com- 
petition for  trade  among  manufacturers."  1 

This  decision  the  Circuit  Court  of  Appeals  reversed, 
saying :  — 

"We  do  not  think  that  the  act  contemplates  that  the  combina- 
tion therein  made  unlawful  must  be  one  which  shall  by  its  terms 
refer  to  interstate  commerce.  It  is  enough  if  its  purpose  and 
effect  are  necessarily  to  restrain  interstate  trade.  If  it  were  other- 
wise, all  combinations  in  restraint  of  interstate  trade  might  be  so 
expressed  in  words  as  to  avoid  the  statute.  The  true  test  would 
seem  to  be,  not  what  the  agreement  professes,  but  what  it  ac- 
complishes. The  combination  must  be  dealt  with  in  view  of  the 
known  facts  which  surrounded  it  when  it  was  formed,  and  which 
still  attend  it.    It  is  impossible  that  the  parties  to  it  had  in  view 

1 102  Fed.  596. 


2oo  THE   FEDERAL  POWER   OVER 

only  domestic  trade.  .  .  .  The  combination  in  the  case  before 
the  court  is  more  than  a  combination  to  regulate  prices;  it  is  a 
combination  to  control  the  production  of  a  manufactured  article 
more  than  four-fifths  of  which  is  made  for  interstate  trade,  and  to 
diminish  competition  in  its  production,  as  well  as  to  advance  its 
price.  These  features,  we  think,  determine  its  object,  and  bring  it 
under  the  condemnation  of  the  law."  x 

Let  all  this  be  admitted.  Had  defendants  agreed  not 
to  sell  to  persons  in  other  States,  or  in  any  way  restricted 
their  right  to  make  interstate  sales,  their  agreement 
would  have  been  illegal  under  the  Federal  statute.  Had 
the  defendants,  leaving  themselves  entirely  free  in  in- 
terstate sales,  restricted  only  their  conduct  in  domestic 
trade  within  the  State  of  Washington,  this  agreement, 
whether  legal  or  illegal  under  State  law,  would  have  been 
unaffected  by  the  Federal  statute.  The  question,  there- 
fore, whether  plaintiff  was  entitled  to  sue  upon  the  Fed- 
eral statute  for  damage  to  his  business,  depends  upon 
the  question  whether  the  commerce  which  was  re- 
strained was  within  the  protection  of  the  statute. 

Now  it  is  clear  that  defendants'  sales  to  plaintiff 
were  domestic  commerce  within  the  State  of  Washing- 
ton. That  plaintiff  may  have  contemplated  a  further 
transaction,  did  not  make  the  transaction  of  purchase 
interstate.  So  far  as  the  second,  hoped-for  transaction 
is  concerned  the  effect  would  be  the  same  had  the  de- 
fendants' agreement  referred  only  to  domestic  trade. 

In  the  Addyston  case  Mr.  Justice  Peckham  said, 
"It  is  the  sale  and  delivery  of  a  certain  kind  and  qual- 
ity of  pipe,  and  not   the  manufacture,  which  is  the 

1  118  Fed.  126-127. 


CARRIERS  AND   CORPORATIONS  201 

material  portion  of  the  contract,  and  a  sale  for  delivery 
beyond  the  State  makes  the  transaction  a  part  of  inter- 
state commerce."  * 

In  Gibbs  v.  McNeeley  the  transaction  is  followed 
one  step  further  back,  and  a  sale  to  the  person  who  in- 
tends to  sell  and  deliver  across  State  lines  is  brought 
within  Federal  jurisdiction.  To  this  course  of  develop- 
ment no  limit  can  be  placed.  "The  defendants  in 
error,"  said  the  Circuit  Court  of  Appeals,  "  were  en- 
gaged in  manufacturing  a  product  of  which,  as  they 
well  knew,  more  than  eighty  per  cent  was  to  be  sold, 
delivered  and  used  in  States  other  than  that  of  its 
manufacture."  The  fact  nevertheless  remains  that  the 
transactions  between  plaintiff  and  defendants  were 
domestic  commerce,  and  that  if  the  combination  among 
the  defendants,  so  far  as  concerned  the  plaintiff,  fell 
within  the  Federal  statute,  it  was  so  only  because  of 
an  act  with  which  the  defendants  were  in  no  way  con- 
nected, —  the  shipment  of  the  shingles  by  plaintiff  to 
other  States  or  foreign  countries. 

In  one  of  its  earlier  forms,  before  it  had  been  so 
amended  by  the  Senate  as  to  be  a  new  bill,  the  Anti- 
trust Act  was  capable  of  this  very  construction. 
Debating  the  bill  in  this  form,  Senator  George  said : 

Whether  an  agreement,  "  shall  be  held  lawful  or  unlawful, 
whether  it  shall  come  within  the  provisions  of  this  bill  or  not, 
depends  upon  an  act  to  take  place  after  the  agreement  is  made. 
So  far  as  this  bill  is  concerned,  the  agreement  may  be  perfectly 
lawful  at  the  time  it  is  made  and  it  will  become  unlawful  by  a 
matter  which  may  take  place  months  afterwards,  and  by  an  act 

1 175  U.  S.  2zz,  242. 


202  THE   FEDERAL  POWER   OVER 

...  to  which  the  parties  to  the  agreement  were  in  no  way  privy, 
and  for  which  they  are  in  no  way  responsible.  For  instance,  A 
and  B  combine  to  raise  the  price  of  domestic  products.  If  the 
thing  stops  there  they  cannot  be  punished  under  this  bill  .  .  . 
but  if  C  .  .  .  having  acquired  some  of  the  goods  .  .  .  transports 
them  from  one  State  to  another,  then  the  crime  is  consummated. 
What  a  remarkable  anomaly  is  that  in  legislation !  The  agree- 
ment when  made  is  lawful,  it  only  becomes  unlawful  by  the  sub- 
sequent act  of  men,  not  parties  to  it,  .  .  .  and,  .  .  .  what  is 
more  remarkable,  it  becomes  unlawful  by  the  lawful  act  of  these 
subsequent  parties."  * 

The  result  of  the  decision  appears  to  be  that  to  protect 
dealings  in  the  eighty  per  cent  of  the  shingles  which 
ultimately  go  to  other  States  or  foreign  countries,  the 
Circuit  Court  of  Appeals  took  jurisdiction  of  the  whole 
trade  in  shingles  in  Washington.  So  in  Bobbs-Merrill 
Co.  v.  Straus2  it  was  said  of  agreements  "embracing 
at  least  ninety  per  cent  of  all  publishers  and  dealers 
in  copyrighted  books"  that  "as  the  combination  extends 
throughout  the  United  States,  by  the  very  terms  of 
the  agreement,  interstate  commerce  is  necessarily  re- 
strained.' ' 

In  Loder  v.  Jayne 3  an  action  for  damages  under  the 
seventh  section  of  the  act  was  sustained,  apparently  on 
the  ground  that  the  combination  of  which  defendants 
were  members  controlled  ninety  per  cent  of  the  trade  in 
proprietary  medicines.  So  far  as  concerned  the  Federal 
statute  the  combination  was  illegal  only  in  so  far  as  it 

1  Speech  in  Senate,  Feb.  4,  1889,  20  Cong.  Rec,  i459>  i4<5o- 

2  139  Fed.  155.     See  also,  Mines  v.  Scribner,  147  Fed.  927. 

3  142  Fed.  1010.  The  distinction  between  domestic  and  interstate  com- 
merce was  neglected  also  by  the  Circuit  Court  of  Appeals,  which  on  Dec.  1, 
1906,  reversed  the  decision  below  on  grounds  which  do  not  concern  the 
present  question. 


CARRIERS  AND   CORPORATIONS  203 

restrained  plaintiff  from  buying  in  other  States  goods 
for  delivery  in  Pennsylvania,  or  from  buying  in  Pennsyl- 
vania, in  original  packages,  goods  which  had  come  from 
other  States.  Damages  appear  to  have  been  awarded 
without  reference  to  this  distinction.  If  this  be  true, 
the  judgment  went  far  beyond  the  Federal  jurisdiction.1 

"Although  the  jurisdiction  of  Congress  over  commerce  among 
the  States  is  full  and  complete,  it  is  not  questioned  that  it  has  none 
over  that  which  is  wholly  within  a  State,  and  therefore  none  over 
combinations  or  agreements  so  far  as  they  relate  to  a  restraint  of 
such  trade  or  commerce.  It  does  not  acquire  any  jurisdiction 
over  that  part  of  a  combination  or  agreement  which  relates  to 
commerce  wholly  within  a  State,  by  reason  of  the  fact  that  the 
combination  also  covers  and  regulates  commerce  which  is  inter- 
state. The  latter  it  can  regulate,  while  the  former  is  subject  alone 
to  the  jurisdiction  of  the  State.  The  combination  herein  de- 
scribed covers  both  commerce  which  is  wholly  within  a  State  and 
also  that  which  is  interstate. 

"In  regard  to  such  of  these  defendants  as  might  reside  and 
carry  on  business  in  the  same  State  where  the  pipe  provided  for  in 
any  particular  contract  was  to  be  delivered,  the  sale,  transporta- 
tion and  delivery  of  the  pipe  by  them  under  that  contract  would  be 
a  transaction  wholly  within  the  State,  and  the  statute  would  not  be 
applicable  to  them  in  that  case.  They  might  make  any  com- 
bination they  chose  with  reference  to  the  proposed  contract, 
although  it  should  happen  that  some  non-resident  of  the  State 
eventually  obtained  it."  2 

In  the  most  recent  cases,  before  the  lower  courts,  this 
distinction  receives  little  attention,  and  the  size  of  the 
defendant   combination   appears   to   be   of  increasing 

*As  to  recovery  of  damages  under  State  law  for  restraint  of  domestic 
commerce,  see  KlingeFs  Pharmacy  v.  Sharp,  64  Atl.  1029. 

2  Mr.  Justice  Peckham  in  Addyston  Pipe  &  Steel  Co.  v.  United!  States, 
175  U.  S.  an,  247. 


204  THE   FEDERAL  POWER   OVER 

importance,  as  is  shown  by  the  repeated  reference  in 
different  cases  to  the  proportion  of  trade  controlled. 

The  jurisdiction  of  Congress  is  founded  however  on 
its  power  over  commerce.  Trade  across  State  lines 
comes  within  Federal  power,  although  it  may  be  con- 
ducted on  a  small  scale.  Large  dealers,  if  they  engage 
only  in  domestic  trade,  as  may  be  true  of  manufacturers 
or  farmers  whose  entire  product  is  sold  where  produced, 
are  beyond  Federal  power.  In  any  event,  State  con- 
trol over  all  trade,  except  that  conducted  across  State 
lines,  is  complete. 

If  this  rule  be  abandoned,  what  standard  of  size  shall 
be  the  test  of  Federal  jurisdiction  ?  And  how  shall  the 
courts  fix  such  a  standard  ? 

"It  would  certainly  be  dangerous  if  the  legislature  should  set  a 
net  large  enough  to  catch  all  possible  offenders  and  leave  it  to  the 
court  to  step  inside  and  say  who  might  rightfully  be  detained,  and 
who  should  be  set  at  large.  That  would,  to  some  extent,  substitute 
the  judicial  for  the  legislative  department  of  government.  .  .  . 
To  limit  the  statute  in  the  manner  now  asked  for,  would  be  to 
make  a  new  law,  not  to  enforce  an  old  one."  * 

The  next  decision  upon  the  Sherman  Act  came  in  the 
case  of  the  Northern  Securities  Company.2    This  case 

1  United  States  v.  Reese,  92  U.  S.  214,  221. 

2  Northern  Securities  Co.  v.  United  States,  193  U.  S.  197;  120  Fed.  721 ; 
Conf.  Minnesota  v.  Northern  Securities  Co.,  123  Fed.  692;  194  U.  S.  48. 
Among  the  many  articles  on  this  case  see  pamphlet  by  Mr.  J.  L.  Thorndike, 
"The  Decision  in  the  Merger  Case"  (Little,  Brown,  &  Co.,  1903);  also 
review  of  this  pamphlet  by  Professor  C.  C.  Langdell,  1 7  Harvard  Law  Review, 
41 ;  and  a  reply  to  Professor  Langdell  by  Governor  Daniel  H.  Chamberlain, 
13  Yale  Law  Journal,  57;  "The  Merger  Case  and  Restraint  of  Trade,"  by 
Sir  Frederick  Pollock,  17  Harvard  Law  Review,  151;  "The  Northern 
Securities  Decision,"  by  Professor  George  F.  Canfield,  4  Columbia  Law 
Review,  315.  "The  Legal  Aspect  of  Monopoly,"  by  Mr.  Herbert  Pope,  20 
Harvard  Law  Review,  167. 


CARRIERS  AND   CORPORATIONS  205 

is  often  mentioned  as  though  holding  that  the  acquisi- 
tion and  ownership  of  competing  concerns  engaged 
both  in  domestic  and  interstate  commerce  is  forbidden 
by  the  Federal  statute.  It  does  not  so  hold.  A  minor- 
ity of  the  Court  found  that  the  Securities  Company 
came  into  existence  only  for  the  purpose  of  suppressing 
competition  between  competing  railways.  Another  jus- 
tice concurred  in  the  result  upon  the  ground,  in  part,  that 
the  decree  enforced  the  purpose  and  policy  of  State  law. 

It  is  entirely  clear  that  the  Court  did  not  depart  from 
its  judicial  functions,  nor  attempt  to  legislate  upon  the 
size  of  corporate  combinations ;  and  clear  too  that  the  ac- 
quisition of  new  interests  or  the  combination  of  different 
interests  under  one  ownership,  either  by  direct  purchase 
or  by  the  holding  of  stock,  was  not  brought  within  the 
statute.  A  rule  which  would  have  this  effect  would 
prohibit  not  only  size  but  growth.  "To  those  only 
very  partially  cognizant  of  the  state  of  stock  holdings  in 
this  country,"  the  United  States  Circuit  Court  of  Ap- 
peals for  the  Fifth  Circuit  said  in  1894,  "the  contention 
seems  to  be  revolutionary."  1  Upon  this  subject  the 
position  of  the  Supreme  Court  is  emphatic.  "The 
formation  of  corporations,"  it  recently  held,  "has 
never  to  our  knowledge  been  regarded  in  the  nature 
of  a  contract  in  restraint  of  trade  or  commerce.  The 
same  may  be  said  of  the  contract  of  partnership."  2 

A  very  large  part  of  the  business  organizations  of  the 
country  have  been  constructed  in  reliance  upon  this 
unquestioned  doctrine, — that  the  union  of  competing 

1  Clarke  v.  Richmond,   &c,  Ry.  Co.,  62  Fed.  328. 

2  United  States  v.  Joint  Traffic  Ass'n,  171  U.  S.  505,  567. 


2o6  THE   FEDERAL   POWER   OVER 

interests  in  one  ownership  is  not,  in  itself,  a  regulation 
of  commerce.1 

No  other  rule  is  consistent  with  constitutional  history. 
The  possibility  of  great  commercial  combinations  by 
means  of  stock  ownership  has  long  been  recognized,2 
but  no  suggestion  has  been  made  of  Federal  jurisdiction 
upon  this  ground,3  nor  is  such  ownership  now  generally 
regarded  as  illegal.4 

1  "Doubtless  these  stockholders  could  lawfully  acquire  by  individual 
purchases  a  majority,  or  even  the  whole  of  the  stock  of  the  reorganized  com- 
pany, and  thus  possibly  obtain  its  ultimate  control ;  but  the  companies  would 
still  remain  separate  corporations  with  no  interests,  as  such,  in  common." 
Pearsall  v.  Great  Northern  R.  R.  Co.,  161  U.  S.  646,  671.  "The  circum- 
stance that  both  companies  are  under  a  common  ownership  does  not  affect 
the  relations  of  the  railway  company  to  the  public."  Willson  v.  Rock 
Creek  R.  R.  Co.,  7  Int.  Com.  Rep.  83,  89.  There  is  a  dictum  in  Clarke 
v.  Central  Ry.,  &c,  Co.,  50  Fed.  338,  346,  that  a  common  ownership  of 
stock  in  competing  railways  is  "within  the  spirit,  if  not  within  the  letter,  of 
the  act  of  Congress."  In  the  Circuit  Court  of  Appeals  a  different  view  was 
taken.  Clarke  v.  Richmond,  &c,  Ry.  Co.,  62  Fed.  328.  That  stock  owner- 
ship is  not  control,  see  Pullman's  Car  Co.  v.  Missouri  Pacific  R.  R.  Co.,  115 
U.  S.  587 ;  Porter  v.  Steel  Co.,  120  U.  S.  649,  670.  Conf.  Pennsylvania  R.  R. 
Co.  v.  Commonwealth,  7  Atl.  368,  a  case  arising  under  State  law;  also 
Commonwealth  v.  New  York,   &c,  R.  R.  Co.,  132  Pa.  St.  591. 

2  House  Report  No.  57,  40th  Cong.,  2d  Sess.,  p.  7,  June  9,  1868.  "Shall 
I  be  met  with  the  statement  that  still  the  old  question  will  arise  of  one  rail- 
road company  buying  out  the  stock  of  another,  consolidating  the  powers  and 
rights  of  separate  railroads  under  the  management  of  one  and  then  regulating 
their  affairs  as  the  one  great  mammoth  company  shall  decide?"  Speech  of 
Senator  Oglesby,  June  3,  1874,  Vol.  2,  Cong.  Rec,  Part  5,  p.  4506. 

3  "The  statutes,  of  this  State  and  of  Massachusetts,  creating  corporations 
for  the  purpose  of  making  canals  and  locks,  connected  with  the  waters  of 
Merrimack  and  Connecticut  Rivers,  and  also  many  statutes,  creating  corpo- 
rations for  the  purpose  of  making  turnpikes  and  bridges,  act  upon  the  com- 
merce between  the  two  States ;  yet  it  is  believed,  that  no  one  ever  suspected, 
that  those  statutes  could  be  deemed  regulations  of  commerce,  within  the 
meaning  of  this  clause  in  the  Constitution  of  the  United  States."  Scott  v. 
Willson,  3  N.  H.  321,  327. 

4  "  We  are  not  aware  that  it  has  ever  been  claimed  that  a  lease  or  purchase 
by  a  farmer,  manufacturer  or  merchant  of  an  additional  farm,  manufactory 
or  shop,  or  the  withdrawal  from  business  of  any  farmer,  merchant  or  manu- 
facturer, restrained  commerce  or  trade  within  any  legal  definition  of  that 
term."  Opinion  of  the  Court  in  United  States  v.  Joint  Traffic  Ass'n, 
171  U.  S.  505,  567;  A.  Booth  &  Co.  v.  Davis,  127  Fed.  875;  Fechteler  v. 
Palm  Bros.  &  Co.,  133  Fed.  462;  Trenton  Potteries  Co.  v.  Oliphant,  58 
N.  J.  Eq.  507;  Oakdale  Mfg.  Co.  v.  Garst,  18  R.  I.  484;  Diamond  Match 
Co.  v.  Roeber,  106  N.  Y.  473. 


CARRIERS  AND   CORPORATIONS  207 

The  primary  relations  of  the  carrier  or  other  corpora- 
tion are  to  the  State  of  its  organization  and  to  the  States 
where  it  operates.  Federal  control  relates  directly 
to  but  one  of  its  functions,  and  to  the  corporation  only 
in  respect  to,  because  of,  and  to  the  extent  of  its  exer- 
cise of,  that  function.  The  means  to  be  adopted  for 
the  encouragement  of  transportation  or  commerce  within 
each  State,  are  determined  by  that  State  alone.  State 
monopolies  of  transportation  have,  therefore,  always 
been  permissible,  save  that  the  States  could  not  refuse 
railroads  operated  by  steam,  the  right  to  make  con- 
nections and  to  transport  goods  to  other  States  as 
granted  by  the  Federal  Act  of  1866.1 

Trading  monopolies  have  also  been  granted  by 
the  States,  subject,  however,  to  the  limitation  which 
prevents  prohibition  of  the  sale  in  original  pack- 
ages of  goods  brought  from  other  States  or  foreign 
countries. 

It  should  be  noted,  too,  that  if  the  combination  of 
competing  interests  in  one  corporation  under  State 
law  be  a  regulation  of  commerce,  all  State  laws  authoriz- 
ing such  consolidations  are  void,  on  grounds  which  are 
independent  of  the  Anti- trust  Act.  The  rule  established 
in  Cooley  v.  Port  Wardens 2  was  that  in  all  matters  of  a 
general  nature,  such  as  admit  of  uniform  regulation 
throughout  the  country,  the  Federal  power  is  exclusive 
of  all  State  action.  It  probably  needs  no  argument  to 
show  that  the  organization  and  consolidation  of  inter- 
state railways,  and  of  other  corporations  engaged  in 
commerce,  and  the  purchase  or  leasing  of  lines  of  road, 

1  United  States  Rev.  Stats.,  Sec.  5258.  2 12  How.  299. 


208  THE   FEDERAL  POWER   OVER 

and  of  additional  plants,  if  within  this  classification  at 
all,  are  matters  of  more  than  local  interest,  and  con- 
cern more  States  than  one.  If,  therefore,  laws  on 
this  subject  be  regulations  of  commerce,  they  have 
long  been  wholly  beyond  the  competency  of  the  State, 
not  because  of  any  Federal  statute,  but  because  of  the 
broad  prohibition  of  the  Constitution.  The  Sherman 
Anti-trust  Law,  if  it  apply  to  such  cases,  is  merely  a 
statutory  declaration  made  in  1890  of  a  rule  which 
has  been  recognized  at  all  times  since  1851,  and  which 
was  announced  by  the  Supreme  Court  in  1824,  as 
long  accepted. 

As  a  matter  of  fact,  however,  the  great  railway  and 
corporate  system  of  the  country  has  been  built  under 
State  law.  With  few  exceptions  the  corporations  have 
been  organized  by  the  States.  From  time  to  time  they 
have  sold  their  property,  or  have  purchased  or  leased 
the  property  of  other  companies,  and  have  consolidated 
or  merged  with  other  corporations.  All  this  has  been, 
and  must  still  be  done,  under  State  law. 

Suppose  a  railroad  organized  under  State  law  should, 
in  order  to  help  another  road,  cease  to  operate  its  own, 
as  is  true,  for  example,  to  a  limited  extent  of  the  West 
Shore  road,  which  no  longer  competes  with  the  New 
York  Central  for  certain  classes  of  business.  Could 
Congress  forfeit  its  charter,  or  compel  it  to  operate? 
And  —  if  the  cesser  were  not  authorized  by  State  law  — 
would  it  be  beyond  the  power  of  the  State  to  do  either? 
The  carrier's  duty  to  receive,  carry,  and  deliver  comes 
from  State  law.  A  State  may  refuse  to  impose  this 
duty  —  may  even   refuse   to   grant  the  privilege  to  a 


CARRIERS  AND   CORPORATIONS  209 

corporation  created  by  it.  New  Jersey  gave  this  right 
for  transportation  between  New  York  and  Philadelphia 
to  the  Camden  &  Amboy  Railroad,  and  denied  it  to 
other  companies.  This  was  the  occasion  for  the  Fed- 
eral statute  of  June  15,  1866,  which  gave  connecting  car- 
riers the  right  to  transport  from  State  to  State,  but  did 
not  assume  to  impose  an  obligation.  The  debates  in 
Congress  when  this  bill  was  under  discussion,  show  very 
clearly  what  then  were  the  powers  of  the  United  States 
and  of  the  States. 

It  is  said  that  the  holding  of  stock  by  the  Northern 
Securities  Company  amounted  to  a  virtual  consolidation 
of  the  Great  Northern  and  Northern  Pacific,  and  for  this 
reason  was  illegal.  Can  Congress  authorize  consoli- 
dation of  railroad  companies,  organized  under  State 
laws?  Congress  has  never  done  so  nor  has  such  a 
theory  been  advanced.  To  hold  now  that  Congress 
can  either  authorize  or  forbid  consolidation  of  State 
corporations,  would  be  a  complete  reversal  of  the  con- 
stitutional doctrines  of  a  hundred  years,  and  would 
require  a  new  reading  of  Gibbons  v.  Ogden  and  of 
Cooley  v.  Port  Wardens. 

Result  of  the  authorities.  In  particular  cases  the 
lines  separating  State  and  Federal  powers  are  often 
difficult  to  trace,  but  the  general  purposes  which  dis- 
tinguish the  two  governments  are  so  well  marked,  that 
if  these  purposes  be  consistently  followed,  particular 
decisions,  even  when  doubtful,  are  not  likely  in  the  end 
to  establish  serious  departure  from  constitutional  prin- 
ciples. 


210  THE   FEDERAL  POWER   OVER 

"  The  powers  delegated  by  the  proposed  constitution  to  the 
Federal  government,"  Madison  said,  "are  few  and  denned;  those 
which  are  to  remain  in  the  State  governments  are  numerous  and 
indefinite.  The  former  will  be  exercised  principally  on  external 
objects,  as  war,  peace,  negotiation,  and  foreign  commerce,  with 
which  last  the  powers  of  taxation  will  for  the  most  part  be  con- 
nected. The  powers  reserved  to  the  several  States  will  extend  to 
all  the  objects  which,  in  the  ordinary  course  of  affairs,  concern  the 
lives,  liberties  and  properties  of  the  people,  and  the  internal  order, 
improvement  and  prosperity  of  the  State."  x 

It  is  not  likely  that  a  union  of  the  States  could,  at 
any  period  of  American  history,  have  been  formed 
upon  another  principle.  We  know,  Mr.  Chief  Justice 
Marshall  said,  that  the  people  of  no  one  State  would 
"  trust  those  of  another  with  a  power  to  control  the  most 
insignificant  operations  of  their  State  government.,,  2 
Congress  should,  indeed,  have  powers  adequate  for  the 
"maintenance  of  harmony  and  proper  intercourse 
among  the  States,"  3  but  this  involved  no  control  over 
State  administration. 

Among  the  matters  thus  left  to  the  States  was  the 
entire  subject  of  corporations.  It  was  long  doubtful 
whether  Congress  could,  for  any  purpose,  establish  a 
corporation  under  its  national  powers.  State  juris- 
diction over  the  subject  was  never  questioned.  Sub- 
stantially all  business  may  be  transacted  in  corporate 
form.  The  transfer  of  corporations  to  Federal  control 
would,  therefore,  be  of  itself  the  establishment  of  almost 
complete  centralization. 

"It  is  undoubtedly  true,"  the  Supreme  Court  re- 

1  Federalist,  No.  45.  2  McCulloch  v.  Maryland,  4  Wheat.  431. 

3  Federalist,  No.  42. 


CARRIERS  AND   CORPORATIONS  21 1 

cently  said,  "that  that  which  is  implied  is  as  much  a  part 
of  the  Constitution  as  that  which  is  expressed,"  and  that 
"among  those  matters  which  are  implied  though  not 
expressed,  is  that  the  nation  may  not,  in  the  exercise  of 
its  powers,  prevent  a  State  from  discharging  the  ordi- 
nary functions  of  government." l  "Not  only,  therefore, 
can  there  be  no  loss  of  separate  and  independent  auton- 
omy to  the  States  through  their  union  under  the  Con- 
stitution, but  it  may  not  be  unreasonably  said  that  the 
preservation  of  the  States,  and  the  maintenance  of  their 
governments,  are  as  much  within  the  design  and  care  of 
the  Constitution,  as  the  preservation  of  the  Union  and 
the  maintenance  of  the  national  government."  2 

A  review  of  the  decisions  of  the  Supreme  Court  upon 
the  Sherman  Act  shows  that  the  Court,  in  construing  the 
statute  which  is  based  upon  the  power  of  Congress  to 
maintain  intercourse  among  the  States,  has  gone  to  the 
verge  of  Federal  jurisdiction.  An  extension  of  present 
doctrines  could  be  made  only  by  sacrifice  of  State 
authority  essential  for  efficient  local  government,  and  — 
a  matter  of  still  greater  importance  —  by  overturning 
long  established  principles  of  constitutional  law. 

1  South  Carolina  v.  United  States,  199  U.  S.  437. 

2  Texas  v.  White,  7  Wall.  700,  725. 


212  THE   FEDERAL  POWER   OVER 


CHAPTER  VIII 

CONCLUSIONS 

The  two  most  important  possessions  of  the  American 
people  are,  —  first,  the  Constitution,  using  the  word 
in  its  broader  meaning  to  include  the  actual  system 
adopted  for  Federal  administration,  together  with  the 
general  plan  of  local  State  government ;  and  second,  the 
habit  of  respect  for  law,  which  distinguishes  an  orderly 
democracy  from  personal  rule. 

There  are  some  who  believe,  possibly  with  good  reason, 
that  the  Constitution  should  be  altered.  Commercial 
and  social  conditions  have  greatly  changed  during  the 
century  last  past,  while  the  Constitution  is  largely 
what  it  was.  Population  has  become  dependent  upon 
remote  sources  of  supply.  Each  State  is  no  longer 
sufficient  for  itself.  It  may  be  that  the  powers  of  the 
common  government  are  inadequate  to  protect  the 
common  interests,  and  if  so  the  central  power  should, 
so  far  as  necessary,  be  increased. 

Importance  of  State  governments.  On  the  other 
hand,  maintenance  of  democratic  government  so  that  its 
administration  shall  be  free  from  partial  influences  and 
directed  for  the  good  of  all,  demands  that  government  be 
kept  close  to  the  whole  people  and  that  all  participate. 


CARRIERS  AND   CORPORATIONS  213 

It  is  difficult  to  secure  capable  and  honest  administra- 
tion of  public  affairs,  but  the  struggle  for  good  govern- 
ment in  cities,  counties,  and  States,  compelling  the  atten- 
tion of  every  citizen,  is  the  only  security  of  the  nation. 
Every  measure  which  impairs  the  power  or  dignity 
of  local  governments,  deteriorates  the  central  authority. 

That  populations  have  become  dependent  upon  remote 
sources  of  supply,  is  true  not  only  of  American  States, 
but  of  all  civilized  nations.  No  country  is  now  suffi- 
cient for  itself.  At  the  same  time,  however,  that  inter- 
national dependence  has  increased,  the  need  for  local 
self-government  has  immensely  increased.  No  one  who 
knows  the  differences  in  character  and  occupations 
which  mark  the  populations  of  our  various  States, 
who  understands  the  importance  and  difficulty  of  the 
many  questions  with  which  State  governments  are 
dealing  each  in  its  own  way,  and  their  growing  com- 
plexity with  growing  population,  can  wish  to  transfer 
these  burdens  to  committees  of  Congress  already  fully 
occupied  with  national  affairs. 

It  is  fortunate  that  the  regulation  of  corporations, 
which  now  takes  public  attention,  can  be  accomplished 
by  State  legislation  (ante,  pp.  156-175).  The  subject 
concerns  so  closely  the  common  affairs  of  daily  life,  and 
should  be  determined  with  reference  to  conditions  and 
occupations  which  vary  so  widely  in  different  States, 
that  its  transfer  to  Federal  control  would  seriously 
limit  local  autonomy. 

It  is  clear  then  that  if  change  in  the  Constitution  be 
necessary,  it  should  be  so  made  as  least  to  restrict  the 
States. 


214  .THE   FEDERAL  POWER   OVER 

Respect  for  law  essential  to  free  government.  Of  the 
habit  of  respect  for  law,  more  may  be  said,  for  here, 
upon  the  general  principle,  all  agree.  Without  this 
habit  government  becomes  dominion  only,  authority 
a  weapon,  safety  impossible,  protection  unknown.  All 
this,  in  form,  is  fully  admitted.  As  a  legal  creed,  none 
doubt  that  the  Constitution  is  the  supreme  law.  As 
a  fact,  however,  popular  expression  upon  particular 
measures,  even  the  attitude  of  some  inferior  courts, 
appears  to  indicate  an  unexpressed  conviction  that  the 
Constitution,  in  the  changed  conditions  of  commercial 
life,  is  no  longer  a  safe  guide ;  that  the  process  of  amend- 
ment for  which  it  provides  is  too  difficult  or  too  slow, 
that  public  interests  make  it  necessary  for  Congress  to 
grasp  and  exercise  new  powers,  and  for  the  courts  to 
support  these  new  jurisdictions.  As  yet  these  views  are 
not  avowed,  their  only  expression  being  found  by  in- 
ference from  the  course  of  government,  the  attitude  of 
public  comment,  and  from  decisions  of  some  subordi- 
nate courts. 

Much  that  is  sought  by  these  methods  should  in  fact 
be  effected.  It  is  equally  true,  however,  and  far  more 
important,  that,  whatever  be  the  merit  of  particular 
measures,  nevertheless,  no  lasting  good  can  come  from 
the  adoption  of  methods  which,  unless  restrained  in  sea- 
son, are  subversive  of  all  government,  which  confuse  ex- 
ecutive, judicial,  and  administrative  functions,  and  place 
the  property,  the  liberty,  —  in  the  end  perhaps  the  life, 
—  of  individuals  at  the  disposition  of  an  authority  which 
acknowledges  no  final  obligation  to  declared  law,  and 
whose  judgment  of  public  necessity  is  contained  in  the 


CARRIERS  AND   CORPORATIONS  215 

decree  made  against  the  person  who  in  a  given  case  may 
be  selected  to  illustrate  governmental  policy.  For  such 
government  it  is  not  likely  that  a  professed  defender 
could  yet  be  found,  and,  nevertheless,  judgments  have 
been  rendered  which  are  possible  only  where  government 
of  this  character  is  possible,  as  may  be  seen  in  cases  al- 
ready mentioned  (ante,  pp.  198-204)  under  the  Anti-trust 
Act,  whose  decision  has  been  controlled  by  the  judicial 
view  that  different  combinations,  to  which  attention 
was  directed  in  different  cases,  possessed  an  undue 
share  of  trade.  There  is  no  legal  standard  of  corpo- 
rate size  by  which  these  judgments  can  be  supported, 
nor  do  they  find  precedent  in  any  decision  of  the  Supreme 
Court.  The  judges  assumed  to  determine  the  political 
policy  of  States  from  which  they  hold  no  power,  they 
required  of  defendants  obedience  to  decrees  which  are 
law  as  against  them"only,  and  are  not  the  equal  law  of  the 
land.     This  is  personal  government,  not  the  reign  of  law. 

For  this  the  sober  consideration  of  society  is  not  pre- 
pared. It  is  necessary,  first  of  all,  that  the  orderly  pro- 
cesses of  law  —  executive  and  legislative  as  well  as  judi- 
cial—  be  resumed;  and  then,  whatever  measures  are 
adopted,  that  they  be  such  as  to  make  real  progress  tow- 
ard permanent  solution  of  undoubted  evils,  not  a  dis- 
traction merely  of  public  attention,  to  lay  foundation  for 
arbitrary  power,  by  gratifications  of  popular  impulse. 

For  this  reason  it  has  been  thought  desirable  to  ex- 
amine constitutional  history  of  the  relation  of  the  Federal 
government  to  carriers  and  corporations,  and  to  show 
as  a  fact  by  the  practice  of  State  and  Federal  govern- 
ments definitely  what  these  powers  are  and  have  been. 


2i6  THE   FEDERAL  POWER   OVER 

Constitutional  construction  by  executive  order.  It  is 
common  to  say  that  Congressional  power  over  corpo- 
rations is  amply  contained  in  the  authority  to  regulate 
commerce  with  foreign  nations,  among  the  several 
States  and  with  the  Indian  tribes;  to  quote  Mr.  Chief 
Justice  Marshall,  that  this  is  a  power  to  regulate  com- 
mercial intercourse  in  all  its  branches,  and  to  add  in 
the  language  of  the  Supreme  Court,  that  the  power  is 
plenary,  that  it  extends  wherever  commerce  extends, 
and  acknowledges  no  limitations  save  those  imposed 
by  the  Constitution. 

Few,  if  any,  doubt  the  correctness  of  these  statements 
which  have  the  weight  of  authority  and  long  acceptance. 
They  fail,  however,  to  answer  the  question — what,  after 
all,  is  the  nature  and  extent  of  this  plenary  power,  and 
what  are  the  limitations  imposed  upon  it  by  the  Con- 
stitution ? 

A  more  direct  answer  is  found  in  the  statement  given 
by  Senator  Knox,  when  Attorney- General,  in  his  speech 
at  Pittsburg,  Oct.  14,  1902.  The  power,  he  said,  is 
nothing  less  than  authority  to  prohibit  commerce,  or  to 
permit  it,  on  whatever  terms  Congress  may  impose.  In 
this  suggestion  he  offered  a  method  to  bring  all  great 
industries  within  Federal  control.  Admitting  appar- 
ently, as  is  unavoidable,  that  the  manufacture  and 
production  of  articles  of  commerce  are  within  Sfcate 
jurisdiction,  as  is  also  the  creation  of  corporations,  de- 
termination of  amount  of  capital,  publicity,  etc.,  Mr. 
Knox  nevertheless  urged,  that  Congress  may  "deny 
to  a  corporation  whose  life  it  cannot  reach,  the  privilege 
of  engaging  in  interstate  commerce,  except  upon  such 


CARRIERS  AND   CORPORATIONS  217 

terms  as  Congress  may  prescribe  to  protect  that  com- 
merce from  restraint."  "Such  a  regulation/'  he  added, 
"would  operate  directly  upon  commerce,  and  only 
indirectly  upon  the  instrumentalities  and  operations  of 
production." 

In  other  words,  the  position  of  the  Attorney- General 
was  that  Congress  has  uncontrolled  power  to  regulate 
or  to  prohibit  interstate  commerce,  and  that  it  may 
use  this  power  to  accomplish  results  that  are  wholly 
beyond  its  jurisdiction. 

This  answer,  so  far  as  it  is  an  answer  at  all,  depends 
upon  the  meaning  of  the  phrase  to  regulate  commerce. 
As  a  matter  of  language  the  words  may  be  given  the 
meaning  thus  ascribed  to  them,  but  they  may  also  be 
given  other  and  very  different  meanings.  Which  of 
these  many  meanings  defines  the  actual  grant  of  power 
contained  in  the  Constitution? 

Speculation  upon  the  correct  interpretation  of  the 
phrase  is  out  of  place.  An  effort  to  fasten  new  meanings 
upon  the  Constitution,  disregarding  history,  national  ex- 
perience, and  final  adjudications  of  time  and  authority, 
is  not  constitutional  construction  and  speaks  only  the 
economic  views  or  the  personal  desires  of  an  individual. 
The  question  of  constitutional  construction  can  be  an- 
swered, as  a  matter  of  fact,  from  the  history  of  the 
power  over  commerce,  so  as  to  leave  no  substantial 
doubt  as  to  the  extent  of  Federal  authority. 

The  right  to  engage  in  commerce.  It  is  said  that  Con- 
gress may  grant  or  withhold  the  right  to  engage  in  inter- 
state commerce.     From  what  authority  then  does  the 


2l8 


THE   FEDERAL   POWER   OVER 


right  of  intercourse  between  persons  of  the  same  or  dif- 
ferent States  arise? 

Only  the  pressure  of  great  interests  could  make  the 
question  seem  debatable.     When  the  Constitution  was 
formed  the  doctrine  of  the  inalienable  rights  of  man  ex- 
pressed, both  in  America  and  in  Europe,  popular  revolt 
against  personal  government,  and  against  the  system 
of  restrictions  and  privileges  upon  which  it  was  built. 
"The  right  to  one's  self,"  Thiers  said,  "to  one's  own 
faculties,  physical  and  intellectual,   one's  own  brain, 
eyes,  hands,  feet,  in  a  word  to  his  soul  and  body,  is 
an  incontestable  right,  one  of  whose  enjoyment  and  ex- 
ercise by  its  owner  no  one  can  complain  and  which  no 
one  can  take  away."    Under  the  old  regime  in  Europe, 
when  "the  prying  eye  of  the  government  followed  the 
butcher  to  the  shambles,  and  the  baker  to  the  oven," 
when  the  peasant  farmer  could  not  "take  the  produce 
which  he  raised  to  market  until  he  had  bought  leave 
to  do  so;  nor  consume  what  remained  of  his  grain  till 
he  had  sent  it  to  the  lord's  mill  to  be  ground,  nor  full 
his  cloths  on  his  own  works,  nor  sharpen  his  tools  at  his 
own  grindstone,  nor  make  wine,  oil  or  cider  at  his  own 
press,"  industry  was  indeed  a  privilege,  and  the  same 
narrow  view  of  human  rights  appears  in  statutes  relat- 
ing to  America,  as,  for  example,  those  which  forbade  the 
manufacture  of  iron,  or  with  some  qualifications  forbade 
trade  with  other  countries  than  England. 

All  such  restrictions  of  trade  and  intercourse  in  this 
country  ended  with  the  outbreak  of  the  Revolution. 

The  right  of  intercourse  between  State  and  State,  Mr. 
Chief  Justice  Marshall  said,  was  not  granted  by  the 


CARRIERS  AND   CORPORATIONS  219 

Federal  Constitution,  but  "  derives  its  source  from  those 
laws  whose  authority  is  acknowledged  by  civilized  man 
throughout  the  world"  —  in  other  words,  the  right  to 
engage  in  interstate  commerce  is  one  of  those  inalienable 
rights,  which  State  governments  were  formed  to  protect, 
and  which  every  person  may  enjoy  under  State  law, 
either  alone,  or  upon  such  terms  as  the  States  may  per- 
mit, in  combination  with  others,  as  a  member  of  a  part- 
nership or  of  a  corporation.  (See  reference  to  Camden 
and  Amboy  monopoly,  pp.  95,  209.)  Constitutional 
history,  the  theories  of  law,  and  the  decisions  of  the 
Supreme  Court  unite  to  support  this  view. 

The  Constitution  knows  no  "  privilege  of  engaging  in 
interstate  commerce."  That  was  not  a  phrase  which 
the  Attorney- General  learned  from  American  history. 
The  Constitution  knows  an  inalienable  right  to  engage 
in  any  of  the  common  occupations  of  life,  including  the 
liberty  to  engage  in  interstate  commerce,  a  liberty  which 
comes  from  State  law  and  belongs  to  those  to  whom 
the  State  gives  it,  whether  citizen,  corporation,  or  alien 
(ante,  pp.  23-37). 

Extent  of  the  Federal  power  of  regulation.  It  is  said, 
however,  that  whether  the  right  to  engage  in  commerce 
be  derived  from  State  or  from  Federal  law,  nevertheless 
its  exercise  may  be  prohibited  by  Congress;  that  over 
foreign  commerce  this  power  has  in  fact  been  exercised 
in  the  embargo  laws,  and  that  control  of  foreign  and  in- 
terstate commerce  being  given  in  the  same  clause  and  in 
the  same  words  is  coextensive. 

This  is  the  theory  of  privilege,  in  form  but  slightly 


220 


THE   FEDERAL  POWER   OVER 


changed,  supported,  as  before,  by  an  argument  upon 
meanings  now  to  be  given  to  the  language  of  the  Con- 
stitution. 

The  argument  proves  too  much.  It  is  true  not  only 
as  to  foreign  and  interstate  commerce,  but  also  as  to 
commerce  with  Indian  tribes,  that  Federal  power  of 
regulation  is  granted  in  the  same  clause,  and  words. 
It  is  common  knowledge,  however,  that  over  Indian 
commerce  Congress  has  long  exercised  powers  which 
are  undoubtedly  beyond  its  authority  in  relation  to 
foreign  nations,  or  to  intercourse  among  the  States. 
In  the  same  way,  distinctions  have  been  recognized 
between  Federal  powers  over  foreign  and  interstate 
commerce. 

In  foreign  relations  the  general  government  stands  in 
the  place  of,  and  represents,  every  State  for  every  na- 
tional purpose.  It  may  exercise  its  control  to  retaliate 
upon  an  unfriendly  nation,  or  to  injure  an  enemy;  to 
influence  international  negotiations,  or  to  avoid  being 
drawn  into  unnecessary  quarrels.  Between  indepen- 
dent nations  having  no  common  court  of  appeal,  pro- 
tection and  self-defence  are  questions  of  power.  Con- 
gress may  therefore  establish  an  embargo  of  foreign 
commerce. 

In  relation  to  interstate  commerce,  Congress  occupies 
no  such  position  and  exercises  no  such  jurisdiction.  As 
Mr.  Chief  Justice  Fuller  very  forcibly  said,  "  under  the 
Articles  of  Confederation,  the  States  might  have  in- 
terdicted interstate  trade,  yet  when  they  surrendered  the 
power  to  deal  with  commerce  as  between  themselves,  to 
the  General  Government,  it  was  undoubtedly  to  form 


CARRIERS  AND   CORPORATIONS  221 

a  more  perfect  union,  by  freeing  such  commerce  from 
State  discrimination  and  not  to  transfer  the  power  of 
restriction  "   (ante,  pp.  48-53). 

It  needs  no  argument  to  show  that  upon  the  main- 
tenance of  this  distinction  depends  the  continued  ex- 
istence of  our  constitutional  form  of  government.  If 
Congress  may  treat  separate  States  as  foreign  nations, 
the  ample  powers  which  were  given  to  the  Federal  gov- 
ernment for  common  protection  against  external  ene- 
mies, are  easily  sufficient  to  control  the  domestic  policy 
of  every  State. 

The  extent  of  Federal  power  to  regulate  interstate 
commerce  cannot  be  measured  by  its  powers  over 
Indian  and  foreign  commerce,  but  must  be  determined 
by  the  purposes  of  the  Constitution,  and  by  the  con- 
struction which  has  been  placed  upon  the  constitutional 
provision. 

When  the  Constitution  was  formed,  and  for  a  consider- 
able time  thereafter,  the  commerce  of  the  country  was 
limited  to  the  foreign  and  coasting  trade.  Commerce 
by  means  of  navigation  was  the  subject  with  which  the 
Constitution  dealt.  Over  this  subject  Federal  control 
was  established  by  the  commerce  clause,  subject  how- 
ever to  the  restrictions  that  no  preference  be  given  to  the 
ports  of  one  State  over  those  of  another,  and  that  ves- 
sels bound  to  or  from  one  State  be  not  obliged  to  enter, 
clear,  or  pay  duties  in  another.  These  expressions  show 
that  the  controlling  idea  of  navigation  was  kept  in  view. 

The  power  of  regulation,  which  the  Constitution 
granted  to  Congress  was  external,  operating  from  the 
ports  outward,  closely  related  to  the  admiralty  power. 


222  THE   FEDERAL  POWER   OVER 

It  did  not  and  could  not  interfere  with  domestic  State 
government.  That  was  "the  simple  power  of  regulat- 
ing trade"  from  which  "no  apprehensions  were  enter- 
tained" and  which  was  granted  by  "the  common  con- 
sent of  America."  Congress  being,  therefore,  without 
jurisdiction  over  carriage  among  the  States,  there  was  no 
need  to  provide  that  it  should  not  tax  or  prohibit  such 
carriage,  for  Congress  had  no  power  to  which  such  a 
restriction  could  apply. 

Land  communication  was  of  subsequent  growth.  Its 
purpose,  like  that  of  the  coasting  trade,  was  to  facilitate 
intercourse  between  the  States,  a  subject  which  even 
from  the  beginning  assumed  great  importance  and  took 
a  large  share  of  public  attention.  Intercourse  between 
the  States  was  not,  however,  a  subject  of  Federal  juris- 
diction. Coasting  trade,  even  between  ports  in  the  same 
State,  was  within  Federal  jurisdiction,  because  con- 
ducted on  the  high  seas  where  the  national  character 
of  the  vessel  was  recognized,  where  she  was  beyond 
State  jurisdiction,  occupying  the  common  property  of 
mankind  subject  to  such  laws  as  had  secured  the  assent 
of  commercial  nations.  Land  communication,  on  the 
other  hand,  was  within  the  control  of  the  State,  because 
conducted  within  its  limits,  subject  to  its  laws. 

Originally  as  a  matter  of  history,  and  primarily  as  a 
matter  of  interest,  communication  between  persons  and 
places  is  of  local  importance.  A  man's  first  concern 
is  to  reach  his  nearest  neighbors  and  his  most  conven- 
ient source  of  supply.  The  same  is  true  of  communities. 
As  means  of  communication  improve  and  transpor- 
tation becomes  easier,  more  distant  communities  come 


CARRIERS  AND   CORPORATIONS  223 

into  touch,  until  finally  communication  is  established  be- 
tween distant  States.  This,  however,  is  but  an  exten- 
sion of  a  service  which  is  within  State  jurisdiction  at 
every  point.  The  Constitution  intended,  in  Madison's 
words,  to  establish  "an  unrestrained  intercourse  between 
the  States,"  but  this  intercourse  was  to  be  "on  the  basis 
of  equal  privileges." 

Over  communication  so  conducted,  therefore,  State 
jurisdiction  was  exercised  to  the  fullest  extent. 

The  problem  of  the  time  was  to  secure  effective  ser- 
vice. States  could  not  establish  and  operate  lines  of 
coaches,  build  bridges,  and  maintain  ferries.  Trans- 
portation must  pay  for  itself,  and  this  could  be  accom- 
plished only  by  giving  exclusive  rights. 

Monopolies  were  granted  therefore  in  every  State, 
operating  across  State  lines,  in  every  direction,  with  the 
express  approval  of  the  Supreme  Court  and  the  legis- 
lative approval  of  Congress.  This  policy  was  neither 
accidental  nor  a  temporary  expedient.  Canals  and  rail- 
ways were  built  in  the  same  way,  and  the  policy  which 
began  in  the  East  extended  throughout  the  country,  and 
continued  unquestioned  until  after  the  Civil  War  —  in 
some  respects  still  continues. 

A  State  could  not,  however,  grant  a  monopoly  of  the 
coasting  trade,  for  this  was  within  Federal  jurisdiction 
over  commerce.  Here,  then,  is  the  "plenary"  power 
to  which  Mr.  Chief  Justice  Marshall  referred,  in  the 
phrase  so  often  quoted  from  Gibbons  v.  Ogden,  a  ple- 
nary power  to  regulate  the  coasting  trade,  —  a  power, 
indeed,  which  acknowledges  no  limitations  save  those 
imposed  by  the  Constitution,  but  which  nevertheless  in 


224  THE   FEDERAL  POWER   OVER 

1824  concerned  communication  by  navigation  when 
conducted  upon  tide  water  {ante,  Ch.  III).  Even  as 
late  as  1855,  it  was  generally  considered,  Mr.  Justice 
McLean  said,  that  "the  right  to  regulate  commerce  had 
been  exhausted"  in  Federal  control  of  navigation. 

What,  then,  is  the  origin  of  the  present  power  which 
Congress  possesses  over  land  transportation? 

The  Constitution  undoubtedly  intended  to  establish 
free  intercourse  among  the  States,  and  for  this  purpose 
imposed  a  number  of  limitations  upon  State  power,  in- 
cluding a  prohibition  of  taxation  of  imports  and  exports. 
These  limitations,  Edmund  Randolph  suggested,  Con- 
gress might  keep  "undiminished  in  their  operation," 
by  legislation  under  the  commerce  clause.  The  sug- 
gestion was  taken  up  by  the  Supreme  Court  in  the  case 
of  Brown  v.  Maryland,  where  the  existence  of  a  Federal 
jurisdiction,  under  the  commerce  clause,  to  prevent 
violation  of  the  constitutional  provision  forbidding 
State  taxation  of  imports,  was  treated  as  a  distinct 
limitation,  by  the  commerce  clause,  upon  State  taxing 
powers  (Ch.  IV). 

This  new  theory  of  construction,  when  adopted,  may 
have  seemed  of  small  importance,  for  the  tax  then  in 
question  was  unconstitutional  on  other  grounds.  In 
the  case  of  the  State  Freight  Tax,  however,  decided  in 
1872,  its  real  importance  began  to  appear.  The  tax 
there  involved  was  imposed  by  a  State  upon  every  ton 
of  freight  carried  within  its  limits.  Such  a  tax,  the  State 
authorities  considered,  was  not  strictly  a  tax  upon  im- 
ports or  exports.  On  the  other  hand,  the  burden  which 
it  imposed  upon  commercial  intercourse  was  as  sub- 


CARRIERS  AND   CORPORATIONS  225 

stantial  as  it  would  have  been  had  it  fallen  within  the 
precise  terms  of  the  constitutional  prohibition.  The 
tax  was  held  invalid  because  prohibited  by  the  commerce 
clause.  Other  applications  of  the  same  argument  have 
deprived  the  States  of  power  to  regulate  rates  charged 
for  interstate  transportation,  have  forbidden  State  taxa- 
tion of  commercial  travellers  negotiating  sales  of  goods 
to  be  brought  from  other  States,  and  in  general  have 
protected  the  trade  of  the  country  from  all  restraints 
(Ch.V). 

The  important  feature  of  this  history  is  that  the  power 
which  Congress  now  possesses  over  intercourse  among 
the  States,  is  not  an  original  power  granted  by  the 
express  terms  of  the  Constitution.  Jurisdiction  derived 
from  the  commerce  clause,  upon  which  so  much  em- 
phasis is  laid  as  a  plenary  power  supreme  over  all 
State  law,  proves,  if  taken  alone  in  its  constitutional 
meaning,  to  be  narrow  and  insufficient  even  to  support 
existing  legislation. 

The  power  of  Congress  rests,  then,  not  upon  this 
clause  alone,  but  upon  the  commerce  clause  in  connection 
with  the  limitations  upon  the  States.  It  is,  in  fact, 
essentially  a  development  of  these  limitations,  —  the 
establishment  of  a  Federal  jurisdiction  to  preserve  inter- 
course among  the  States  from  unconstitutional  impedi- 
ments, a  power  to  keep  open  the  ways  from  State  to 
State.  Federal  authority  over  intercourse  is  the  product 
of  a  history  in  which  the  limitations  upon  the  States 
and  the  declared  purposes  of  the  Constitution  have  been 
of  controlling  importance;  it  is  a  resulting  power,  ex- 
pressed only  in  the  decisions  of  the  Supreme  Court, 

Q 


226  THE   FEDERAL  POWER  OVER 

which  have  developed  the  existing  jurisdiction  and  alone 
mark  its  extent  and  its  limitations.  In  this  course  of 
decisions  may  be  found  not  only  a  monument  to  the 
great  men  who  have  sat  upon  the  bench  of  that  Court, 
but  a  lasting  memorial  of  the  constructive  statesman- 
ship of  the  Constitution.  "If  there  be  any  single  fruit 
of  our  national  unity/'  Senator  Sumner  said,  "if  there 
be  any  single  element  of  the  Union,  if  there  be  any 
single  triumph  of  the  Constitution  which  may  be 
placed  above  all  others,  it  is  the  freedom  of  commerce 
among  the  States,  under  which  that  free  trade,  which  is 
the  aspiration  of  philosophers,  is  assured  to  all  citizens 
of  the  Union,  as  they  circulate  through  our  whole  broad 
country,  without  hindrance  from  any  State."  With- 
out hindrance,  indeed,  from  the  United  States  itself, 
for  the  jurisdiction  which  Congress  has  acquired  over 
the  avenues  of  interstate  trade,  is  a  jurisdiction  to  pre- 
vent impediments,  an  "  element  of  Union,"  in  Senator 
Sumner's  phrase,  and  does  not  authorize  the  closing  of 
these  avenues  to  any  person. 

Regulation  for  purposes  beyond  Federal  jurisdiction. 

The  establishment  of  Federal  control  over  the  commerce 
of  the  country,  in  the  methods  proposed,  by  compulsory 
incorporation  under  Federal  law  or  by  a  system  of  gov- 
ernmental license  depends,  not  only  upon  acceptance  of 
the  proposition  that  Congress  may  at  will  exclude  any 
person  or  corporation  from  interstate  commerce,  but 
also  upon  the  further  proposition  that  Congress  may 
exercise  this  power  to  accomplish  results  which  are 
wholly  beyond   its  jurisdiction.      Such  a  regulation, 


CARRIERS  AND   CORPORATIONS  227 

the  Attorney- General  said,  "would  operate  directly 
upon  commerce,  and  only  indirectly  upon  the  instru- 
mentalities and  operations  of  production." 

This  is  but  the  announcement  of  the  doctrine,  as  a 
principle  of  internal  governmental  administration,  that 
Congress  may  rightfully  do  whatever  it  can,  by  indirect 
methods,  bring  about. 

Federal  incorporation  receives  no  assistance  from  this 
doctrine,  for,  even  if  government  could  exclude  State 
corporations  from  commerce,  it  cannot  establish  a  gen- 
eral system  of  its  own  (Ch.  VI). 

As  to  the  proposed  plan  of  Federal  license,  the  ar- 
gument is  unnecessarily  complicated.  If  constitutional 
rules  dividing  State  and  Federal  authority  be  super- 
seded by  the  doctrine  that  jurisdiction  is  a  question  of 
power,  authority  to  raise  and  support  armies  may  be 
used  to  turn  municipal  or  State  elections;  while  by  its 
authority  over  water  supply,  over  the  mails,  over  patents 
and  copyrights,  and  in  other  ways,  Congress  may  reach 
the  domestic  affairs  of  every  State,  and  of  every  home. 

Constitutional  democracy  and  the  reign  of  law,  end, 
therefore,  in  arbitrary  government,  and  the  result  is 
announced  as  a  principle  of  constitutional  construction, 
employed  in  this  instance  to  protect  popular  rights 
against  encroachments  of  monopoly. 

No  such  method  of  construction  has  yet  received 
judicial  sanction  (ante,  pp.  53-57). 

The  Anti-trust  Act.  The  great  forces  which  guide 
the  development  of  society,  and  the  relations  of  indi- 
viduals, classes,  and  communities  to  each  other,  and  to 


228  THE   FEDERAL  POWER   OVER 

government,  are  beyond  control  of  statute,  of  judicial 
precedent,  of  public  opinion  itself.  We  cannot  now 
establish  laws  suitable  to  the  social  organization  which 
shall  follow  us,  nor  foresee  the  forms  coming  society  may 
assume.  One  thing,  however,  we  may  expect,  that  the 
relations  of  individuals  and  classes  will  grow  closer,  that 
their  mutual  dependence  will  increase,  and  that  the 
functions  of  government  will  extend  over  individual 
activities  to  a  greater  extent  than  ever  before. 

In  this  new  field,  the  different  American  commu- 
nities are  likely  to  follow  different  courses,  some  per- 
haps moving  toward  State  monopoly,  as  in  the  case  of 
the  South  Carolina  Dispensary  law,  others  seeking  the 
widest  individualism  and  freest  competition  possible 
under  new  conditions.  All  these  matters  of  State  policy 
are  beyond  Federal  jurisdiction.  Governmental  inter- 
ference with  individual  activities,  accepted  because  nec- 
essary, welcomed  by  none,  demands  the  completest 
measure  of  home  rule. 

The  evils  of  child  labor,  of  the  misuse  of  insurance 
funds,  —  these  and  many  other  matters  depend  for 
improvement  upon  the  rising  intellectual  and  moral 
standards  of  the  people.  They  cannot  be  reformed 
from  without,  nor  can  public  conscience  be  delegated. 
The  first  condition  for  effective  reform  is  complete  local 
responsibility. 

To  turn  over  to  a  single  legislative  body  the  vast  in- 
tricacies of  social  life  throughout  the  country,  that  it  may 
prepare  a  system  applicable  to  all  conditions, —  to  child 
labor  in  the  South,  for  example,  and  in  the  tenements  of 
New  York,  —  is  not  to  hasten  the  adoption  of  better 


CARRIERS  AND   CORPORATIONS  229 

methods,  but  to  place  important  governmental  powers 
in  the  hands  of  those  who  can  exercise  them  with  the 
greatest  difficulty  and  with  the  least  knowledge  of  local 
conditions.  It  is  in  effect,  so  far  as  concerns  many  vital 
interests,  to  abandon  the  effort  for  good  municipal 
and  State  government,  and  once  for  all,  to  intrust  local 
fortune  and  prosperity  to  external  authority. 

It  is  of  great  importance  in  all  these  matters,  and 
particularly  at  the  present  time  in  commercial  affairs, 
that  State  jurisdiction  be  not  superseded,  but  that  the 
Federal  Constitution  be  construed,  as  it  has  been,  so 
as  to  prevent  restrictions  upon  intercourse  among  the 
States,  at  the  same  time  that  each  State  is  left  free, 
so  far  as  possible,  to  follow  its  own  courses  in  the  com- 
ing development. 


INDEX 

Anti-trust  Act 156 

mischief  to  be  remedied 156 

debate  in  Congress 161 

provisions  of  statute 177 

limit  to  Federal  authority       168 

Construction  of  statute 

collateral  contracts 184 

injunctions 185 

combinations  of  laborers 186 

application  to  railroads 186 

"reasonable"  restraints 189 

Combinations  within  Federal  jurisdiction 

statute  does  not  relate  to  ownership 196 

The  Knight  Case 196 

contracts  for  delivery  across  State  lines 197 

recent  confusion  in  lower  courts 198 

Gibbs  v.  McNeeley       199 

judicial  legislation  as  to  corporate  size 202 

judicial  regulation  of  State  commerce 201 

Brown  v.  Maryland 101 

Camden  &  Amboy  R.  R.  monopoly 95,  209 

Carriers,  nature  of  Federal  power  over 
see  Chapter  V 
duty  to  receive,  carry,  and  deliver,  see  Duty 

Charter  of  incorporation 

different  views  as  to  its  nature 138 

opinion  of  Alexander  Hamilton       138,  139 

debate  in  Constitutional  Convention 140 

charter  of  United  States  Bank 143 

trading  companies 146 

interstate  carriers 149 

territorial  corporations 154 

231 


232  INDEX 

Coasting  trade 

extent  of  Federal  power  over 86,  131 

see  Chapter  III 

Commerce 

definition  of  word 82,  121  note  2 

by  land  and  by  water,  difference 77 

extent  of  Federal  power  over 219 

right  to  engage  in,  see  Right 

Commerce  clause 

purpose  of 10 

as  a  limitation  upon  State  powers        102 

Edmund  Randolph's  construction  of 102,  131 

Constitutional  Convention 

proceedings  relating  to  commerce n 

debate  on  Federal  incorporation 140 

Cooley  v.  Port  Wardens 

extent  of  rule  announced 116 

construction  placed  upon  this  decision 116 

application  in  subsequent  cases       118 

the  legislative  question  involved 119 

Corporations 

nature  of  Federal  power  concerning 
see  Chapter  VI 

nature  of  State  power 172 

their  necessity  in  modern  society 157 

Harrington  on  inequality  of  power 158 

limitation  upon  corporate  size 175 

President  Roosevelt's  views  opposing  limitation 175 

Declaration  of  Independence 

as  a  guide  to  constitutional  construction 31 

Duty  of  carrier,  to  receive,  carry,  and  deliver 

derived  from  State  law 124 

decisions  under  English  law 125 

rule  of  Supreme  Court 83 

application  of  this  rule  in  case  of  Camden  &  Amboy  R.  R.    .  209 

Emigration,  right  of 

guaranteed  by  State  Constitutions 66,  note  5 

Eminent  domain 

history  of  Federal  power 150 

Erie  Canal  as  a  monopoly 94 


INDEX  233 

Exclusiveness  of  power  to  regulate  commerce 

history  of  this  doctrine 78,  115,  117 

Exile,  for  offences  against  State  law 66,  note  5 

"Exports,"  meaning  of  word 39 

Foreign  and  interstate  commerce 

difference  in  Federal  powers  over 35,  48 

Freights  and  fares.     Federal  power  to  regulate 222 

see  Chapter  V 

Gibbons  v.  Ogden 

place  in  constitutional  history 58 

effect  of  broad  phrases  in  opinion 97 

its  rule  restricted  to  the  coasting  trade 88 

see  Chapter  III 

Gibbs  v.  McNeeley ^ 

Gross  Receipts,  Case  of  State  Tax  on 134 

Hamilton,  Alexander 

opinion  as  to  nature  of  corporate  charters 138 

as  to  Federal  power  to  incorporate 139,  146 

as  to  method  of  constitutional  construction       54 

Illinois  &  Michigan  Canal  as  a  monopoly 95 

"Imports,"  meaning  of  word 3^ 

Interstate  and  domestic  commerce 

line  dividing  State  and  Federal  powers 168 

see  Chapter  V 
Interstate  and  foreign  commerce 

difference  between  Federal  powers  over 35,  48 

Interstate  carriers,  charter  of *49 

case  of  Texas  &  Pacific  R.  R 154 

Land  transportation,  Federal  power  over 

not  derived  from  commerce  clause i32>  224 

Lecky,  W.  H. 

necessity  of  a  written  constitution 8 

"Liberty'1 

meaning  of  word  in  Constitution 23 

its  Puritan  origin 29 

relation  to  Calvinistic  doctrines 29 

the  inalienable  rights  of  man 28 


234  INDEX 

includes  right  to  engage  in  commerce 34 

right  is  derived  from  State  law 24 

License  Cases        II2 

License,  Federal,  for  corporations 

relation  of  plan  to  scheme  of  government 3 

relation  to  constitutional  construction 227 

effort  to  license  ferries  in  1852 13° 

Local  self-government 

essential  to  free  government 1,  6, 


De  Tocqueville,  views  on 


212 

1 


McCulloch  v.  Maryland *43 

Mercantile  corporations,  Federal  charters  for 146 

Monopolies  by  State  law 5° 

stage-coach  monopolies 60 

ferry  and  bridge  monopolies 64,  92 

Livingston  &  Fulton,  monopoly  of  navigation 70 

monopoly  of  navigation  of  Merrimac  River 91 

of  Chattahoochee  River 91 

Erie  Canal  as  a  monopoly 94 

of  railway  transportation  through  New  Jersey 95,  209 

Illinois  &  Michigan  Canal  as  a  monopoly 95 

National  Bank  Act 144 

Navigation,  relation  of  Federal  power  to 22,  83 

New  York  v.  Miln i12 

Northern  Securities  Case 204 

Nullification  as  a  judicial  question       99>  IIX 

Original  package  rule i°i 

Pacific  R.  R.,  charter  of i52 

Passenger  Cases 112 

Paterson,  William 

proposals  relating  to  commerce       15 

Pease,  Levi 

stage-coach  monopolies  of 60 

Purpose  of  constitutional  construction S3>  227 

Randolph,  Edmund 

proposals  for  control  of  commerce       12 

views  as  to  scope  of  commerce  clause 102 


INDEX  235 

"Reasonable"  restraints 189 

Regulate  commerce 

meaning  of  phrase 22,  23 

a  "simple  power"     . 6 

not  an  indefinite  jurisdiction       12,  21,  210 

exclusiveness  of  power,  history 78,  115,  117 

Regulation  for  unconstitutional  purposes 53 

Respect  for  law,  essential  to  free  government 214 

Story's  views  on  this  subject 9 

"Restraint  of  trade" 

meaning  of  phrase 178 

does  not  mean  unequal  ability  to  compete 159 

Right  to  engage  in  commerce 217 

derived  from  State  law 23,  37,  96 

Marshall's  decision  on  this  subject 33 

an  inalienable  liberty 33 

correlative  duty  of  carrier  also  of  State  origin        124 

application  of  this  rule  in  Camden  &  Amboy  R.  R.  Cases    95,  209 

Rousseau,  J.  J. 

tendency  of  democracy  to  change  form 9 

his  influence  in  eighteenth  century       27,  note  3 

Slavery,  influence  of 108 

State  Freight  Tax,  Case  of 133 

State  governments,  their  importance 1,  212 

Stock  ownership,  not  corporate  control 206 

Trading  companies,  charter  of 146 

in  Federal  territories *54 

Willson  v.  Blackbird  Marsh  Creek  Co 104 

Windom  Report I35>  note 

Written  constitution 

necessity  of,  in  a  democracy 8 

maintenance  of,  essential  to  independence  of  judiciary  ...  9 

the  sole  protection  from  arbitrary  government 8 

Gibbs  v.  McNeeley       198 


TABLE   OF  CASES 

A.  Booth  &  Co.  v.  Davis,  127  Fed.  875 206 

Addyston  Pipe  &  Steel  Co.  v.  United  States,  175  U.  S.  211     129,  203 

Allgeyer  v.  Louisiana,  165  U.  S.  578 34 

Almy  v.  California,  24  How.  169 40 

American  Biscuit  Co.  v.  Klotz,  44  Fed.  Rep.  721 196 

American  Fertilizing  Co.  v.  Board  of  Agriculture,  43  Fed.  Rep.  609  40 

American  Steel  &  Wire  Co.  v.  Speed,  192  U.  S.  500      ....  40 

Anderson  v.  United  States,  171  U.  S.  604 195 

Atlanta  v.  Chattanooga  Foundry  Co.,  101  Fed.  Rep.  900    .     .     .  185 

Atlanta  v.  Chattanooga  Foundry  Co.,  123  Fed.  Rep.  23     .     .     .  185 

Atlantic  &  Pacific  Co.  v.  Philadelphia,  190  U.  S.  160    .     .     .     .  118 

Barrett  v.  Stockton,  etc.,  Ry.  Co.,  2  M.  &  G.  163 41 

Barrett  v.  Stockton,  etc.,  Ry.  Co.,  3  M.  &  G.  956 41 

Barrett  v.  Stockton,  etc.,  Ry.  Co.,  11  CI.  &  F.  590 41 

Bement  v.  National  Harrow  Co.,  186  U.  S.  70 184 

Biddle  v.  Commonwealth,  13  S.  &  R.  405 101 

Blindell  v.  Hagan,  54  Fed.  Rep.  40 186 

Blindell  v.  Hagan,  56  Fed.  Rep.  696 186 

Bluthenthal  v.  Railway,  84  Fed.  Rep.  920 128 

Board  of  Trade  v.  Christie  Grain  &  Stock  Co.,  198  U.  S.  236      .  195 

Bobbs-Merrill  Co.  v.  Straus,  139  Fed.  Rep.  155 202 

Bowman  v.  Chicago,  etc.,  Ry.  Co.,  115  U.  S.  611      .     .     .  34,  83,  96 

Bowman  v.  Chicago,  etc.,  Ry.  Co.,  125  U.  S.  465 118 

Bridge  Co.  v.  Kentucky,  154  U.  S.  204 118 

Brown  v.  Houston,  114  U.  S.  622 39,  118 

Brown  v.  Maryland,  12  Wheat.  419 39,  101,  132 

Butchers'  Union  Co.  v.  Crescent  City  Co.,  in  U.  S.  746     ...  34 

Buttfield  v.  Stranahan,  192  U.  S.  470       48 


Camden  &  Amboy  R.  R.  Cases,  15  N.  J.  Eq.  13 95 

Camden  &  Amboy  R.  R.  Cases,  16  N.  J.  Eq.  321 95 

237 


238  TABLE    OF   CASES 

Camden  &  Amboy  R.  R.  Cases,  18  N.  J.  Eq.  546 95 

Cardwell  v.  Bridge  Co.,  113  U.  S.  205 118 

Carroll  v.  Campbell,  108  Mo.  550        92,  130 

Case  of  the  State  Freight  Tax,  15  Wall.  232     ..     .  83,  105,  118,  133 
Cattle  Raisers  Assn.  v.  Fort  Worth,  etc.,  R.  R.  Co.,  7  Int.  Com.  Rep. 

5i3 J95 

Charge  to  Grand  Jury,  62  Fed.  Rep.  828 186 

Charge  to  Grand  Jury,  62  Fed.  Rep.  834 186 

Charge  to  Grand  Jury,  62  Fed.  Rep.  840 186 

Charles  E.  Wisewall,  The,  74  Fed.  Rep.  802 185 

Charles  E.  Wisewall,  The,  86  Fed.  Rep.  671 185 

Chattanooga,  etc.,  Works  v.  City  of  Atlanta  —  decided  by  United 

States  Supreme  Court  Dec.  3,  1906 185 

Chicago  Wall  Paper  Mills  v.  General  Paper  Co.,  147  Fed.  Rep.  491      185 

Chilvers  v.  People,  11  Mich.  43 92,  130 

Cincinnati  Packet  Co.  v.  Bay,  200  U.  S.  179 194 

City  of  Chicago  v.  Netcher,  55  N.  E.  Rep.  707 34 

Clarke  v.  Central  Ry.,  etc.,  Co.,  50  Fed.  Rep.  338 206 

Clarke  v.  Richmond,  etc.,  Ry.  Co.,  62  Fed.  328    ....      205,  206 

Clyde  S.  S.  Co.  v.  Burrows,  36  Fla.  121       127 

Coffeyville  Vitrified  Brick  Co.  v.  Perry,  76  Pac.  Rep.  848  ..     .       35 

Collins  v.  New  Hampshire,  171  U.  S.  30 54 

Commonwealth  v.  Huntley,  156  Mass.  236 119 

Commonwealth  v.  King,  1  Whart.  448 42 

Commonwealth  v.  New  York,  etc.,  R.  R.  Co.,  132  Pa.  St.  591  .     .     206 

Commonwealth  v.  Straus,  78  N.  E.  136 194 

Compagnie  Fran<;aise  v.  State  Board  of  Health,  186  U.  S.  380      .       54 

Connolly  v.  Union  Sewer  Pipe  Co.,  184  U.  S.  540 185 

Continental  Wall  Paper  Co.  v.  Lewis  Voight   &  Sons  Co.,  U.  S. 

Cir.  Ct.  of  Appeals,  6th  Circuit,  Dec.  4,  1906       ....     185 

Conway  v.  Taylor's  Executor,  1  Black  603 92,  130 

Cooley  v.  Board  of  Wardens,  12  How.  299 80,  116,  207 

Corfield  v.  Coryell,  4  Wash.  C.  C.  Rep.  371 33,  no 

Cornell  v.  Coyne,  192  U.  S.  418 39,  40 

Corning,  in  re,  51  Fed.  Rep.  205 196 

Covington  Bridge  Co.  v.  Kentucky,  154  U.  S.  204 67 

Covington  Bridge  Co.  v.  Sanford,  164  U.  S.  578 35 

Crandall  v.  Nevada,  6  Wall.  35 14,  83,  114,  118,  168 

Crouch  v.  London  &  N.  W.  Ry.,  14  C.  B.  255     ...     .      125,  127 

Crutcher  v.  Kentucky,  141  U.  S.  47 48,  83,  96 

Cuban  S.  S.  Co.  v.  Fitzpatrick,  66  Fed.  Rep.  63 no 

Cynosure,  The,  1  Sprague  88 112 


TABLE   OF   CASES 


239 


Debs,  in  re,  158  U.  S.  564 

Delaware,  L.,  &W.  R.  R.  Co.  v.  Frank,  no  Fed.  Rep.  689 
Dennehy  v.  McNulta,  86  Fed.  Rep.  825       .... 
Diamond  Match  Co.  v.  Roeber,  106  N.  Y.  473     .     . 
Dikerman  v.  Northern  Trust  Co.,  176  U.  S.  181    .     . 
Dooley  v.  United  States,  183  U.  S.  151 


129, 


Elkison  v.  Deliesseline,  2  Wheel.  Cr.  Cas.  56     .     . 

Elliot  v.  Rossell,  10  Johns.  1 

Ellis  v.  Inman  Poulsen  &  Co.,  124  Fed.  Rep.  956 
Ellis  v.  Inman  Poulsen  &  Co.,  131  Fed.  Rep.  182 
Erdman  v.  Mitchell,  56  Atl.  Rep.  327  .  .  .  . 
Escanaba  Co.  v.  Chicago,  107  U.  S.  678  .     .     .     . 


Fairbank  v.  United  States,  181  U.  S.  283  ... 
Farmers',  etc.,  National  Bank  v.  Dearing,  91  U.  S 
Fechteler  v.  Palm  Bros.  &  Co.  133  Fed.  462      .     .     . 

Ferry  Co.  v.  Wilson,  28  N.  J.  Eq.  537 

Foster  v.  The  Master,  etc.,  of  the  Port,  94  U.  S.  246 


29 


Rep 


General  Electric  Co.  v.  Wise,  119  Fed 
Gibbons  v.  Ogden,  9  Wheat.  1    .     .    . 
Gibbs  v.  McNeeley,  102  Fed.  Rep.  594 
Gibbs  v.  McNeeley,  107  Fed.  Rep.  210 
Gibbs  v.  McNeeley,  118  Fed.  Rep.  120 
Gilman  v.  Philadelphia,  3  Wall.  713    . 
Gloucester  Ferry  Co.  v.  Pennsylvania,  114  U 
Greene,  in  re,  52  Fed.  Rep.  104 
Greer  v.  Payne,  4  Kan.  App.  153 
Greer  v.  Stoller,  77  Fed.  Rep.  1 
Groves  v.  Slaughter,  15  Pet.  449 
Gulf,  Colorado,  etc.,  Co.  v.  Ellis, 
Gulf,  etc.,  Ry.  Co.  v.  Miami  S.  S 


922 
33> 


34,  58 


165  U.  S.  150 
Co.,  86  Fed. 


96 


Rep 


407 


99, 


186 
185 
185 
206 

185 
40 


in 
124 
198 
198 

34 
118 


39 
146 
206 

92 
118 


.     184 

105,  i32 
.  198 
.  198 
.  198 
76,  106 
67,  118 

196,  197 

•     i95 

181,  186 

5i,66 

31*  35 

.     186 


Hadley  Dean  Plate  Glass  Co.  v.  Highland  Glass  Co.,  143  Fed.  Rep. 

242 l67,  184 

Hagan  v.  Blindell,  56  Fed.  Rep.  696 186 

Hall  v.  DeCuir,  95  U.  S.  485 Il8 

Hanson  v.  Vernon,  27  Iowa  28        36 

Hardy  v.  R.  R.  Co.,  32  Kan.  398 119 

Harrison  v.  Glucose,  etc.,  Refining  Co.,  116  Fed.  Rep.  304     .     .     185 


24o  TABLE   OF   CASES 

Henderson  v.  Mayor,  etc.,  92  U.  S.  259 54,  "7>  II8 

Hennington  v.  Georgia,  163  U.  S.  299 54 

Hinson  v.  Lott,  8  Wall.  148 36 

Hoke  v.  Henderson,  4  Dev.  (N.  C)  12 23,  55 

Hopkins  v.  United  States,  171  U.  S.  578 195 

Independent  Baking  Powder  Co.  v.  Boorman,  130  Fed.  Rep.  726  184 

Indiana  Mfg.  Co.  v.  Machine  Co.,  148  Fed.  Rep.  21 184 

Ingraham  v.  National  Salt  Co.,  130  Fed.  Rep.  676 185 

Inman  v.  St.  Louis,  etc.,  Co.,  37  S.  W.  Rep.  37 127 

Inman  v.  St.  Louis,  etc.,  Co.,  14  Texas  Civ.  Ap.  39 127 

Jackson,  ex  parte,  96  U.  S.  727 36>  51 

Jacobson  v.  Massachusetts,  197  U.  S.  11 33 

Kellyville  Coal  Co.  v.  Harrier,  69  N.  E.  Rep.  927 34 

Kenner  v.  Lake  Shore  R.  R.  Co.,  23  Ohio  Circuit  Ct.  Rep.  294      185 

Kidd  v.  Pearson,  128  U.  S .  1 5,  *7° 

KlingeFs  Pharmacy  v.  Sharp,  64  Atl.  1029 203 

Kohl  v.  United  States,  91  U.  S.  367 152 

Lake  Shore,  etc.,  R.  R.  Co.  v.  Smith,  173  U.  S.  684 127 

Lanyon  v.  Garden  City  Sand  Co.,  79  N.  E.  Rep.  313      ....     194 

Leisy  v.  Hardin,  135  U.  S.  100 118 

License  Cases,  5  How.  504 48,51,76,97,103,112,114 

Loan  Association  v.  Topeka,  20  Wall.  655 36 

Loder  v.  Jayne,  142  Fed.  Rep.  1010 202 

Lord  v.  S.  S.  Co.,  102  U.  S.  541 49>  89>  I21 

Lottery  Case,  188  U.  S.  321 40,  51,  57 

Louisville,  etc.,  Co.  v.  Kentucky,  188  U.  S.  385 35 

Lowry  v.  Tile  Association,  98  Fed.  Rep.  817 198 

Lowry  v.  Tile  Association,  106  Fed.  Rep.  38 198 

Lumberville  Bridge  Co.  v.  State  Board,  55  N.  J.  L.  529    .     .     .     119 
Luxton  v.  North  River  Bridge  Co.,  153  U.  S.  525 153 

Marshall  v.  Baltimore  &  Ohio  R.  R.  Co.  16  How.  314  ....      52 

Martin,  ex  parte,  7  Nev.  140 39 

Master,  etc.,  of  Port  of  New  Orleans  v.  Ship  "M.  J.  Ward,"  14  La. 

Ann.  287 119 

McCulloch  v.  Maryland,  4  Wheat.  316 55,  144,  210 

Merz  Capsule  Co.  v.  United  States  Capsule  Co.,  67  Fed.  Rep.  414     197 


TABLE   OF   CASES  241 

Midland,  etc.,  Ferry  Co.  v.  Wilson,  28  N.  J.  Eq.  537    ....  130 

Mines  v.  Scribner,  T47  Fed.  Rep.  927 202 

Minnesota  v.  Barber,  136  U.  S.  313 54 

Minnesota  v.  Northern  Securities  Co.,  194  U.  S.  48 204 

Minnesota  v.  Northern  Securities  Co.,  123  Fed.  Rep.  692  .     .     .  204 

Mitchel  v.  Reynolds,  1  P.  Wms.  181 26 

Mobile  v.  Kimball,  102  U.  S.  691 34,  117,  118 

Mobile  &c.  R.  Co.  v.  Tennessee,  153  U.  S.  486 34 

Monongahela  Navigation  Co.  v.  United  States,  148  U.  S.  312      .  36 

Montague  v.  Lowry,  193  U.  S.  38 198 

Montague  v.  Lowry,  115  Fed.  Rep.  27 198 

Mors  v.  Slue,  T.  Raym.  220       124 

Mugler  v.  Kansas,  123  U.  S.  623 54 

Muller  v.  Baldwin,  L.  R.  9  Q.  B.  457 41 

North  River  Steamboat  Co.  v.  Livingston,  3  Cow.  713  ....  96 
Northern  Securities  Co.  v.  United  States,  193  U.  S.  197.  179,  181,  204 
Northern  Securities  Co.  v.  United  States,  120  Fed.  Rep.  721  .     .     204 

Norton  v.  Thomas  &  Sons  Co.,  93  S.  W.  711       194 

New  York  v.  Miln,  n  Pet.  102 106,  112,  113,  114 

Newport  v.  Taylor's  Executor,  16  B.  Monroe  699  ....  92,  130 
Nugent  v.  Smith,  L.  R.  1  Com.  PI.  Div.  19 124, 127 

Oakdale  Mfg.  Co.  v.  Garst,  18  R.  I.  484 206 

Ouachita  Packet  Co.  v.  Aiken,  121  U.  S.  444 118 

Pacific  R.  R.  Cases,  127  U.  S.  1 35 

Packard  v.  Taylor,  35  Ark.  402 127 

Packet  Co.  v.  Catlettsburg,  105  U.  S.  559 118 

Passaic  Bridges,  3  Wall.  782 77,  99 

Passenger  Cases,  7  How.  283 48,  98,  108,  112,  114 

Paul  v.  Virginia,  8  Wall.  168 53 

Pavesich  v.  New  England  Life  Ins.  Co.,  50  S.  E.  Rep.  68 .     .     .  34 

Pearsall  v.  Great  Northern  R.  R.  Co.  161.  U.  S.  464     ....  206 

Peik  v.  Chicago,  etc.,  R.  R.  Co.,  94  U.  S.  164 135 

Pennsylvania  R.  R.  Co.  v.  Commonwealth,  7  Atl.  368    ....  206 

People  v.  Wabash  R.  R.  Co.,  104  111.  476 135 

Perrin  v.  Sikes,  1  Day  19 63 

Pervear  v.  Commonwealth,  5  Wall.  475 104 

Phillips  v.  Iola  Cement  Co.,  125  Fed.  Rep.  593 194 

Pidcock  v.  Harrington,  64  Fed.  Rep.  821      ........  186 

Pierce  et.  al.  v.  New  Hampshire,  5  How.  504 97 

R 


242  TABLE   OF   CASES 

Pittsburg  Coal  Co.  v.  Louisiana,  156  U.  S.  590 39 

Porter  v.  Steel  Co.,  120  U.  S.  649 2o6 

Post  v.  Southern  Ry.  Co.,  52  S.  W.  301 186 

Pound  v.  Turck,  95  U.  S.  459 Il8 

Prescott,  etc.,  R.  R.  Co.  v.  Atchison,  etc.,  R.  R.  Co.,  73  Fed.  Rep. 

438 l86 

Prescott,  etc.,  R.  R.  Co.  v.  Atchison,  etc.,  R.  R.  Co.,  84  Fed.  Rep. 

213 186 

Preston  v.  Finley,  72  Fed.  Rep.  850 39 

Pullman's  Car  Co.  v.  Missouri  Pacific  R.  R.  Co.,  115  U.  S.  587  .  206 

Pullman's  Car  Co.  v.  Twombly,  29  Fed.  Rep.  658 78 

R.  R.  Commission  Cases,  116  U.  S.  307 51 

R.  R.  Co.  v.  Richmond,  19  Wall.  584 128 

R.  R.  Co.  v.  Maryland,  21  Wall.  456 78,  86,  135 

R.  R.  v.  Husen,  95  U.  S.  465 54,  "8 

Rapier,  in  re,  143  U.  S.  no 36,  51 

Reid  v.  Colorado,  187  U.  S.  137 54 

Rice  v.  Standard  Oil,  134  Fed.  Rep.  464 160,  179 

Robbins  v.  Taxing  District,  120  U.  S.  489 Il8 

Rubber  Tire  Wheel  Co.  v.  Milwaukee  Rubber  Works  Co.  142  Fed. 

Rep.  531 l84 

Scott  v.  Donald,  165  U.  S.  58 54 

Scott  v.  Sanford,  19  How.  393 9 

Scott  v.  Willson,  3  N.  H.  321 206 

Scribner  v.  Straus,  130  Fed.  Rep.  389 184 

Searight  v.  Stokes,  3  How.  151 15° 

Shelton  v.  Piatt,  139  U.  S.  591 186 

Shuster  v.  Ash,  n  S.   &  R.  90 43 

Smith  v.  Turner,  7  How.  283 81 

South  Carolina  v.  United  States,  199  U.  S.  437 211 

Southern  Indiana  Express  Co.   v.  United   States   Express   Co., 

88  Fed.  Rep.  659 186 

State  v.  Ash  brook,  55  S.  W.  Rep.  627 34 

State  v.  Dodge,  56  Atl.  Rep.  983 34 

State  Freight  Tax  Case,  15  Wall.  232 37 

State  v.  Mayor,  etc.,  of  Des  Moines,  103  Iowa  76 36 

State  v.  Missouri  Tie  Co.,  80  S.  W.  Rep.  933 35 

State  v.  Pittsburg,  etc.,  Coal  Co.,  41  La.  Ann.  465 39 

Steam  Ferry  Boat  William  Pope,  1  Newb.  Adm.  241      .     .     .92,  130 
Steamboat  Co.  v.  Livingston,  1  Hopk.  Ch.  149 91,  123 


TABLE    OF   CASES 


243 


Steamboat  Co.  v.  Livingston,  3  Cow.  713 96 

Steamship  Co.  v.  Pennsylvania,  122  U.  S.  326       118 

St.  Louis  Drayage  Co.  v.  Louisville  &  N.  R.  Co.,  65  Fed.  Rep.  39  186 

Stockton  v.  Baltimore  &  N.  Y.  R.  R.  Co.,  32  Fed.  Rep.  9      .      152,  153 

Stoughtenburgh  v.  Hennick,  129  U.  S.  141 118 

Sturges  v.  Crowinshield,  4  Wheat.  122 79 

Swift  &  Co.  v.  United  States,  196  U.  S.  375 198 


Telegraph  Co.  v.  Pendleton,  122  U.  S.  347   . 

Terrell,  in  re,  51  Fed.  Rep.  213 

Texas  v.  White,  7  Wall.  700        

Tiernan  v.  Rinker,  102  U.  S.  123    .... 
Thomas  v.  Ry.  Co.,  62  Fed.  Rep.  803      .     . 
Transportation  Co.  v.  Parkesburgh,  107  U.  S.  691 
Trenton  Potteries  Co.  v.  Oliphant,  58  N.  J.  Eq.  507 
Turpin  v.  Burgess,  117  U.  S.  504 


118 
196 
211 
118 
186 
118 
206 
40 


United 
United 
United 
United 
United 
United 
United 
United 
United 
United 
United 
United 
United 
United 
United 

United 
United 
United 
United 
United 
United 
United 
United 


States  v. 
States  v. 
States  v. 
States  v. 
States  v. 
States  v. 
States  v. 
States  v. 
States  v. 
States  v. 
States  v. 
States  v. 
States  v. 
States  v. 
States  v. 

States  v. 
States  v. 
States  v. 
States  v. 
States  v. 
States  v. 
States  v. 
States  v. 


Addyston  Pipe  &  Steel  Co.,  85  Fed.  Rep.  271     178,  183 

Agler,  62  Fed.  Rep.  824 186 

Cassidy,  67  Fed.  Rep.  698       186 

Chesapeake,  etc.,  Fuel  Co.,  105  Fed.  Rep.  93     .     197 

Cisna,  1  McLean  254 51 

Debs,  64  Fed.  Rep.  724 179,  186,  188 

Elliott,  62  Fed.  Rep.  801 186, 191 

Elliott,  64  Fed.  Rep.  27 186 

Freight  Association,  166  U.  S.  290     .     .179,  186,  193 


Freight  Association,  53  Fed.  Rep.  440 
Freight  Association,  58  Fed.  Rep.  58 
43  Gallons  of  Whiskey,  93  U.  S.  188 


187 

181 

48 


Greenhut,  50  Fed.  Rep.  469 196 

Jellico  Mt.  Coal,  etc.,  46  Fed.  Rep.  432  .  .  .  197 
Joint  Traffic  Association,  171  U.  S.  505    .     .     . 

160,  179,  180,  181,  193,  194,  205,  206 
Joint  Traffic  Association,  76  Fed.  Rep.  895    .     .     181 

E.  C.  Knight  Co.,  156  U.  S.  1 197 

E.  C.  Knight  Co.,  60  Fed.  Rep.  306  .  .  196,  197 
E.  C.  Knight  Co.,  60  Fed.  Rep.  934  ...  .  197 
Northwestern  Express  Co.,  164  U.  S.  686      .     .       35 

Popper,  98  Fed.  Rep.  423 48 

Reese,  92  U.  S.  214 204 

Steamboat  James  Morrison,  1  Newb.  Adm.  241        92 


244  TABLE   OF   CASES 

United  States  v.  Swift  &  Co.,  122  Fed.  Rep.  529 83,  198 

United  States  v.  Workingman's  Council,  54  Fed.  Rep.  994      .     .     186 

Veazie  v.  Moor,  14  How.  568 ;    .    .     .    .    170 

Wabash  Railway  Co.  v.  Illinois,  118  U.  S.  557 118,  135 

Walling  v.  Michigan,  116  U.  S.  446 118 

Ward  v.  Maryland,  12  Wall.  418 119 

Waterhouse  v.  Comer,  55  Fed.  Rep.  149 186 

Welton  v.  Missouri,  91  U.  S.  275 117,  118 

Wheaton  v.  Peters,  8  Pet.  591 80 

Wheeling  Bridge  Case,  13  How.  518 76 

Whitwell  v.  Continental  Tobacco  Co.,  125  Fed.  Rep.  454  ...     194 

Wiggins  Ferry  Co.  v.  East  St.  Louis,  107  U.  S.  365 92 

Williams  v.  Fears,  179  U.  S.  270 34 

William  Jarvis,  The,  1  Sprague  485 112 

Willson  v.  Blackbird  Creek  Marsh  Co.,  2  Pet.  245 104 

Willson  v.  Rock  Greek  R.  R.  Co.,  7  Int.  Com.  Rep.  83  .     .     .     .     206 

Wilson,  The  Brig  v.  United  States,  1  Brock.  423 66,  112 

Woodruff  v.  Mining  Co.,  18  Fed.  Rep.  753 51 

Woodruff  v.  Parham,  8  Wall.  123 $8,  39,  133 


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